Author Archives: tipswatch

Going Negative: 5-Year TIPS Auctions With A Real Yield Of -0.049%

Summary Returns for this new TIPS will slightly lag inflation over the next five years. The negative yield is an omen that the markets see a troubled economy ahead. The inflation breakeven rate came in at 1.82%, a little higher … Continue reading

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I Bond Dilemma: Buy Now, Buy Later, Or Split The Decision?

Summary Buy before May 1 and get a higher variable rate; buy after May 1 and possibly get a higher fixed rate. Waiting will cost you short term, and it might take about 4 years to break even. But I … Continue reading

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New 5-Year TIPS Auction Is Suddenly Looking Like A Loser

Summary Real yields have declined sharply in recent days, dropping the 5-year yield to 0.03%. When the 5-year TIPS yield approaches zero, I Bonds and bank CDs become attractive alternatives. Inflation expectations have been declining over the last month, even … Continue reading

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Inflation Dips In March, I Bond’s Variable Rate Will Fall To 1.96% On May 1

Summary At the May 1 reset, the I Bond’s variable rate will fall from 2.76% to 1.96%. We don’t know yet what the new fixed rate will be. Will it rise to 0.1%? Still possible. Should you buy I Bonds … Continue reading

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I Bond Investors: April May Be Your ‘Decision Month’

Summary Inflation report on April 14 will set the I Bond’s six-month variable rate, taking effect May 1. Right now, it looks like the new six-month variable rate could be lower than the current 2.76%. However, it’s possible the May … Continue reading

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10-Year TIPS Reopening Auctions With A Real Yield Of 0.466%

Summary 10-year TIPS yields have been holding under 0.50% even as the Federal Reserve raises short-term rates. The inflation breakeven rate dipped to 1.95%, under the 2.00% mark where it had been riding for most of 2017. Inflation expectations are … Continue reading

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10-year TIPS will reopen at auction March 23; will yield be high enough to be attractive?

Summary A week out, CUSIP 912828V49 is trading with a real yield to maturity of 0.48%. Its inflation-breakeven rate is 2.04%, right in the mid-range of inflation expectations since 2009. Is it a buy? Maybe not at the current yield, … Continue reading

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