Author Archives: Tipswatch

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.

Here’s Why You Should Shun Treasury’s New 20-Year Bond

Summary The 20-year bond will re-launch Wednesday for the first time since 1986 at a regularly scheduled auction. The nominal yield should be about 1.05%. The Treasury will raise $20 billion in this auction, part of a massive borrowing effort … Continue reading

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U.S. Inflation Fell 0.8% In April, Largest Drop Since 2008

Summary Gasoline prices fell a remarkable 20.6% in April, setting off a deflationary surge across the economy. Core inflation fell to 1.4% year over year, breaking a 27-month streak of rates at or above 2.0%. Inflation-protected investments, especially TIPS, will … Continue reading

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Treasury Cuts I Bond Fixed Rate To 0.0%; Holds Steady On EE Terms

Summary U.S. Series I Savings Bonds purchased from May to October will pay a composite rate of 1.06%, annualized, for six months. EE Bonds will continue to double in value if held for 20 years, creating a tax-deferred, compounded rate … Continue reading

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Real Yield On New 5-Year TIPS Dips Deeply Negative, At -0.32%

Summary The new Treasury reality is negative real returns and stunningly low inflation expectations. The auction result of a real yield to maturity of -0.320% matched the Treasury’s overnight estimate. The inflation breakeven rate of 0.69% makes this TIPS – … Continue reading

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As 5-Year TIPS Auction Approaches, Real Yields Are On The Move

Summary A new 5-year Treasury Inflation-Protected Security — CUSIP 912828ZJ2 — will be created at auction Thursday. This TIPS looks likely to get a real yield to maturity in the range of -0.20% to -0.30%, but a firm prediction is … Continue reading

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Here’s Why The I Bond’s Fixed Rate Will Fall To 0.0% On May 1

Summary Real yields for TIPS are now negative across the entire maturity spectrum: 5-year, 10-year and 30-year. The Treasury has no reason to keep the I Bond’s fixed rate above 0.0% when the 10-year TIPS is yielding -0.50%. Act before … Continue reading

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Inflation Report Sets I Bond’s New Variable Rate At 1.06%

Summary U.S. Series I Savings Bonds purchased before May 1 will pay a composite interest rate of 2.22% for six months, and then 1.26% for six months. I Bonds remain the world’s best inflation-protected investment, especially if you purchase them … Continue reading

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I Bonds Offer Opportunity As A Short-Term Investment

Summary A unique feature of I Bonds is that yields are set for six-month periods and won’t change. Investors can now lock in the current yield of 2.22% for six months. Deflation is coming, but shouldn’t be reflected harshly in … Continue reading

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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 … Continue reading

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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 … Continue reading

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