Real Yields Are Rising, But Not Enough To Be Attractive

Summary

  • 10-year real yields (meaning yields above inflation) briefly dipped into negative numbers in August, but have climbed 30 basis points since then.
  • The Treasury is offering a 10-year TIPS reopening auction on Thursday, but the real yield still isn’t attractive.
  • The 10-year inflation breakeven rate is running at about 1.63%, below average annual inflation over the last 10 years. That will make this TIPS attractive to big money investors.

The U.S. Treasury on Thursday will auction $12 billion in a reopening of CUSIP 9128287D6, creating a 9-year, 8-month Treasury Inflation-Protected Security.

Should you consider a purchase? 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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