Author Archives: Tipswatch

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 →

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 →

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 →

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 →

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 →

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 →

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 →

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 →

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 →

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 →