This Week’s 10-Year TIPS Auction Spotlights Our ‘New Reality’

Summary

  • The real yield is likely to come in around 0.35%, more than 60 basis points below where these yields started the year.
  • The inflation break-even rate was about 1.77% as of Friday. That might seem low, but it is a fair reflection of current inflation.
  • The superior alternative is the U.S. Series I Savings Bond, currently offering a real yield of 0.50%, tax-deferred interest and a flexible maturity.

The U.S. Treasury will offer a new 10-year Treasury Inflation-Protected Security – CUSIP 9128287D6 – in a $14 billion auction Thursday, with the real yield likely to fall substantially below recent results for this term.

Read my full analysis on SeekingAlpha.com

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About Tipswatch

Author of Tipswatch.com blog, David Enna is a long-time journalist based in Charlotte, N.C. A past winner of two Society of American Business Editors and Writers awards, he has written on real estate and home finance, and was a founding editor of The Charlotte Observer's website.
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1 Response to This Week’s 10-Year TIPS Auction Spotlights Our ‘New Reality’

  1. Lynne's avatar Lynne says:

    Thanks for the timely article! Valuable information for decision making

Leave a reply to Lynne Cancel reply