- Expect volatility in the Treasury market this week because the Federal Reserve’s Open Market Committee will issue a statement Wednesday, one day before the auction.
- At this point, CUSIP 128286N5 is heading toward a real yield of about 0.35%, 78 basis points below a similar auction in December. Buyers will be paying a premium price.
- A very low inflation breakeven rate of about 1.48% should bring strong market demand for Thursday’s auction.
The U.S. Treasury on Thursday will reopen CUSIP 9128286N5, auctioning $15 billion of a 4-year, 10-month Treasury Inflation-Protected Security. This is an especially interesting auction because it follows six months of rather dramatic yield declines.