10-Year TIPS Reopening Gets A Gorgeous Result

Summary

  • This was an investor-friendly auction: The real yield of 0.68% was much higher than looked likely a week ago.
  • The inflation breakeven rate of 0.43% is “out-of-normal” low and seems to be pricing in a dire economic future.
  • Treasury markets are in flux, with asset pricing and yields difficult to predict.

One of the strangest weeks in the history of Treasury Inflation-Protected Securities ended Thursday with a beautiful result for investors: The Treasury’s reopening auction of a 10-year TIPS got a real yield to maturity of 0.680%, much higher than looked likely just days ago.

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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