Author Archives: tipswatch

10-Year TIPS Reopening Auctions With A Real Yield Of 0.512%

Summary The after-inflation yield was the highest at auction for this term since January 2016, breaking a string of 10 auctions under 0.50%. The inflation breakeven rate came in at 1.84%, a reasonable number but well off the lows of … Continue reading

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U.S. Inflation Rose 0.1% In October, Hitting Expected Number

Summary Both the headline and core inflation numbers matched the consensus estimates, so no surprises in today’s numbers. Non-seasonally adjusted inflation declined slightly in October, which will cause a slight drop in TIPS principal balances in December. A December rate … Continue reading

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10-Year TIPS Will Reopen At Auction Thursday; Is It Worth A Look?

Summary The real yield could rise above 0.50% for the first time since January 2016. If that trend holds, should you consider an investment? The inflation breakeven rate is currently 1.89%, which is reasonable but puts this TIPS in the … Continue reading

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Does The Social Security COLA Shortchange Seniors?

Summary The COLA formula is based on an index that slightly lags overall inflation. The COLA formula uses an ‘averaging’ formula that lessens the impact of short-term spikes in inflation. The COLA formula falls well below the inflation-adjusted returns of … Continue reading

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Treasury Raises I Bond Fixed Rate To 0.1%, Sets Composite Rate At 2.58%

Summary Investors waiting to complete their I Bond allocation for 2017 have the green light: Buy in November. A fixed rate of 0.1% means these I Bonds should be held longer than I Bonds with a fixed rate of 0.0%. … Continue reading

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I Bond Investors: Yes, It’s Possible The Fixed Rate Will Rise

Summary How does the Treasury determine the I Bond fixed rate? It’s a mystery. A recent surge in 5-year real yields seems to justify an increase in the fixed rate, and 10-year real yields are also rising. Most I Bond … Continue reading

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30-Year TIPS Reopening Auctions With A Real Yield Of 0.908%

Summary The after-inflation yield came in right on target, based on pre-auction trading in this TIPS on the secondary market. The inflation breakeven rate was a moderate 1.92%. This TIPS seems fairly priced versus a nominal 30-year Treasury. Long-term real … Continue reading

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