Summary
- Five-year real yields have dropped nearly 100 basis points in the last six months. That’s a huge move in anticipation of Federal Reserve rate cuts.
- Today’s real yield of 0.152% had to be a disappointment to investors, who also had to pay a premium price for this TIPS.
- The five-year inflation breakeven rate climbed a bit to 1.60%, indicating somewhat stronger demand for inflation protection.
The Treasury’s $15 billion reopening auction of CUSIP 9128286N5 – creating a 4-year, 10-month Treasury Inflation-Protected Security – generated a real yield of 0.152%, dramatically lower than recent auctions of this term.
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Treasury Inflation-Protected Securities 
It is true that I could have redeemed it when the rate was 1.9%, and maybe could have earned more…