Category Archives: Investing in TIPS

Summary Today’s reopening auction generated a real yield of 0.501%, a whopping 59 basis points lower than the originating auction on February 21, 2019. Investors had to pay a huge premium for the 1.0% coupon rate, about $115.68 for about … Continue reading →

Summary The real yield looks likely to come in around 0.46%, down 63 basis points from the originating auction in February. Buyers will be paying a steep premium for the coupon rate of 1.0%, about 15% above par value. The … Continue reading →

Summary The TIP ETF has had a total return of 8.33% so far in 2019, slightly outperforming the overall bond market. Shorter-term TIPS funds have also performed well, but the gain has been less dramatic. A relatively low 10-year inflation … Continue reading →

Summary Both headline and core inflation numbers came in higher than expected, indicating inflation is not ‘dead’ and deflation is not looming. The July number sets a path for a 1.6% to 1.8% increase in the 2020 Social Security cost-of-living … Continue reading →

Summary The Social Security Administration uses a complex formula, and an unusual inflation index, to set the annual COLA increase. Once again, the Social Security COLA looks like it will be lower than overall U.S. inflation. (That wasn’t true for … Continue reading →

Summary The real yield is likely to come in around 0.35%, more than 60 basis points below where these yields started the year. The inflation break-even rate was about 1.77% as of Friday. That might seem low, but it is … Continue reading →

Summary The monthly “headline” inflation number and core inflation for the month and year all came in higher than the consensus forecasts. Overall U.S. inflation is being held down by declining gasoline prices, but core inflation is running at 2.1%, … Continue reading →