This Week’s 10-Year TIPS Reopening Looks … Who Knows?

Summary

  • Market turmoil has created incredible volatility, even for mundane investments like U.S. Treasurys.
  • Friday’s real yield of 0.04% would have been “attractive,” but it isn’t likely to hold in light of the Federal Reserve’s rate-cutting action Sunday.
  • The current 10-year inflation breakeven rate of 0.90% makes this TIPS a much more attractive investment versus a 10-year nominal Treasury. But that could also swing wildly.

In the midst of all this volatility, the Treasury on Thursday will offer $12 billion in a reopening auction of CUSIP 912828Z37, creating a 9-year, 10-month TIPS.

Read my full analysis on SeekingAlpha.com

10-year real yield

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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