5-Year TIPS Auction Results In Surprisingly Low Yield

Summary

  • The real yield to maturity of 0.054% was much lower than Treasury estimates at the market close Wednesday.
  • The inflation break-even rate popped up to 1.50%, still low but higher than recent trends.
  • Obviously, this TIPS issue was met with strong investor demand, indicated by both the lower-than-market yield and then higher-than-trending inflation break-even rate.

The U.S. Treasury’s auction today of $17 billion in a new five-year Treasury Inflation-Protected Security generated a surprisingly low real yield to maturity of just 0.054%. That was well below the Treasury’s estimate of 0.22% at the market close on Wednesday.

Read my full analysis on SeekingAlpha.com

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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