Category Archives: Investing in TIPS

Skip This 10-Year TIPS Auction, Buy I Bonds Instead

Summary Thursday’s 10-year TIPS reopening looks likely to get a real yield to maturity of around 0.64%, well below January’s 0.919%. Investors will pay a premium, because the real yield will be well below the coupon rate of 0.875%. U.S. … Continue reading

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U.S. Inflation Rose 0.2% In February; I Bond Investors Get Bit Of Good News

Summary In a reversal of recent trends, food and energy prices increased while other prices were muted. Core inflation rose only 0.1% in the month, below the consensus estimate of 0.2%. Non-seasonally adjusted inflation rose 0.42% in February, a bit … Continue reading

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30-Year TIPS Auctions With Real Yield Of 1.093%, To Strong Demand

Summary The after-inflation yield of 1.093% was well below the real yield of 1.235% generated at an October auction of the same term. Indirect buyers – meaning big money investors like foreign central banks – bought a record 82% of … Continue reading

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This Week’s New 30-Year TIPS Still Isn’t A Winner

Summary 30-year real yields have been climbing, but remain below levels that would make them “interesting.” The 30-year inflation breakeven rate is currently trending at 1.9%, an attractive number but one that reflects the reality of stubbornly low inflation. Conclusion: … Continue reading

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U.S. Inflation Was Unchanged In January, Dips To 1.6% For A Year

Summary Gasoline prices fell 5.5% in January, continuing a downward force on headline inflation. Headline inflation has fallen from 2.9% in June 2018 to 1.6% in January. Core inflation, which removes food and energy, rose a moderate 0.2% in January … Continue reading

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Painful Truth: Inflation Protection Has Been A Losing Bet

Summary Inflation over the last 10 years has averaged just 1.8% a year, much lower than investors were predicting in 2010. Investing in Treasury Inflation-Protected Securities is a “bet” that inflation will run higher than expected, or at least match … Continue reading

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Auction Of New 10-Year TIPS Generates Real Yield Of 0.919%

Summary The real yield came in 19 basis points below a similar reopening auction in November 2018, just two months ago. The inflation breakeven rate of 1.82% was the lowest for this term since an auction in September 2017, a … Continue reading

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