10-Year Real Yields Are Rising, But Still Not Attractive

Summary

  • The Treasury will reopen CUSIP 912828ZZ6 on Thursday, creating a 9-year, 8-month TIPS.
  • The current market for this TIPS shows it with a real yield (after inflation) to maturity of -0.85% and a price of about $109.85 for $100 of par value.
  • The inflation breakeven rate is currently about 1.74%, which looks fair.

The U.S. Treasury will reopen CUSIP 912828ZZ6 at auction Thursday, creating a 9-year, 8-month Treasury Inflation-Protected Security. Although market conditions have improved slightly for a TIPS of this term, I don’t think many small-scale investors are going to find it attractive.

Read my full analysis on SeekingAlpha.com

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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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