Summary
- At Friday’s close, the Treasury’s estimate of the real yield of a five-year TIPS stood at 0.25%, a bit higher than recent numbers.
- At that yield, the five-year inflation break-even rate would come in at 1.34%, an extremely low number.
- I expect reasonably strong demand for this new issue, but smaller-scale investors can find a better alternative with I Bonds, or possibly insured bank CDs.
The U.S. Treasury on Thursday will auction $17 billion in a new five-year Treasury Inflation-Protected Security – CUSIP 912828YL8. The real yield to maturity and resulting coupon rate will be set by the auction bidding.
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Treasury Inflation-Protected Securities 