Summary
- The Treasury market isn’t attractive right now for small scale investors.
- A real yield of 0.149% was the lowest for any 9- to 10-year TIPS since an auction in September 2016 generated a real yield of 0.052%.
- The inflation break-even rate came in at 1.62%, low by historical standards but not out of line with recent results.
Because the real yield of Thursday’s auction came in under the coupon rate of 0.250%, the result is that investors paid a premium over par value for the resulting 9-year, 8-month TIPS.
Read my full analysis on SeekingAlpha.com
Treasury Inflation-Protected Securities 
Just when you thought it was safe to go into the water…the Great White Fed returns! It’s like the FED is just making things worse by desperately trying to prevent an inevitable recession.
I’m not trying to make the argument for the “all seeing eye of market forces”. But, occasional recessions actually do manage to help prevent depressions. By controlling market bubbles.
Granted, the FED does have a rather contradictory duel mandate of managing inflation and unemployment. But, lowering interest rates with the stock market over 27,000? Really?.
In my humble opinion the whole world economy is a debt ridden house of cards.I guess it’s been that way for years now but I’m old enough to remember otherwise.
Back in the day, it would have been unthinkable for TIPS to venture into negative yield territory. It was just considered to be an academic exercise to discuss it. And, negative interest rates? WTF!
Since I just started collecting SS at age 70 to maximize my benefits and have a nice wad of cash in CD’s earning 3%, I’ll be OK without taking any risks going-forward.
I’ve also got around 12% in iBonds and TIPS as an inflation hedge. I was planning on increasing this to a much higher percentage by now. But, both have been real dogs the last few years.
Last year, when the FED started to ever so slowly increase rates, it looked like things were slowly returning to normal. I was hoping by now to see interest rates in the 3 to 4 percent range.
However, with the FED going into Freddy Kruger mode again, it looks like rates that existed prior to the Great Recession are a thing of the past.
Over 10 years since the Great Recession and the FED is still treating the economy as if it is still on life support.
Perhaps that is because the world economy really IS in terminal condition.