Category Archives: Investing in TIPS

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 →

Summary The TIP ETF has lost more than 6% of its value in a few days, and is falling sharply again this morning. A key reason is that inflation expectations are plummeting, causing the TIP ETF price to fall versus … Continue reading →

Summary The inflation numbers came in close to the consensus, but year-over-year core inflation came in slightly high at 2.4%. Investors are pricing in extremely low inflation over the next 10 years. Is this an overreaction to short-term news? Yes, … Continue reading →

Summary Series I Savings Bonds purchased through April 30 will have a permanent “real yield” of 0.2%, well above TIPS yields of any maturity. I Bonds carry many benefits over TIPS, including tax-deferred interest and rock-solid deflation protection. Another Savings … Continue reading →

Summary The real yield of 0.261% was the lowest for any 29- to 30-year TIPS auction in history, and much lower than the previous record of 0.479%. The coupon rate also set a record low of 0.250%, much lower than … Continue reading →