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.
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Treasury Inflation-Protected Securities 