30-Year TIPS Reopening Auctions With A Real Yield Of 0.934%

Posted on June 21, 2018 by Tipswatch

Summary

  • The result matched market expectations, so no surprises.
  • Investors had to pay a premium to get the coupon rate of 1.0%, with an adjusted price of about $103.31 for about $101.57 for par value.
  • The inflation breakeven rate came in at 2.12%, exactly where it was in the February originating auction.

Read my full analysis on SeekingAlpha.com

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Say ‘No’ To This Week’s 30-Year TIPS Auction

Posted on June 17, 2018 by Tipswatch

Summary

  • While shorter-term real yields have been gradually increasing, the 30-year yield has actually been declining.
  • Investors at Thursday’s auction will probably pay a 2% premium over par value because this TIPS currently has a market yield below the coupon rate of 1.00%.
  • On the positive side, the current inflation breakeven rate of 2.13% is reasonable and attractive.

Read my full analysis on SeekingAlpha.com

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Annual U.S. Inflation Hits 6-Year High In May Report

Posted on June 12, 2018 by Tipswatch

Summary

  • ‘Headline’ inflation rose 0.2% in May, but is up 2.8% over the last 12 months, highest since February 2012.
  • Core inflation also increased 0.2%, showing that gasoline prices are not the sole source of inflationary pressure.
  • Non-seasonally adjusted inflation was up 0.42% in May. What does this means for holders of TIPS and I Bonds?

Read my full analysis on SeekingAlpha.com

Also, I have updated my Inflation and I Bonds page with the new numbers.

And here are the new July inflation indexes for all TIPS.

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Here’s A Step-By-Step Guide To Using The Treasury’s New Savings Bond Calculator

Posted on June 4, 2018 by Tipswatch

Summary

  • The Savings Bond Wizard has been a useful tool for Savings Bond investors for more than 15 years. Now it is gone.
  • The Treasury has replaced it with the Savings Bond Calculator, a similar Web-browser-based tool that is a bit less user friendly.
  • I’ve created a step-by-step guide for exporting your bond data from the Wizard to the Calculator.

Read my step-by-step guide at SeekingAlpha.com

Posted in Investing in TIPS | 17 Comments

10-Year TIPS Reopening Generates Real Yield Of 0.934%, Highest In 7 Years

Posted on May 17, 2018 by Tipswatch

Summary

  • This was the highest after-inflation yield for any 9-to-10 year TIPS auctioned since January 2011.
  • A yield of 0.934% above inflation is moving the return on a 10-year TIPS back into “more normal” levels after years of yield suppression.
  • The inflation breakeven rate was 2.18%, higher than any recent auction. Inflation expectations are rising.

Read my full analysis on SeekingAlpha.com

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