Treasury Inflation-Protected Securities

• A week out, CUSIP 912828V49 is trading with a real yield to maturity of 0.48%.
• Its inflation-breakeven rate is 2.04%, right in the mid-range of inflation expectations since 2009.
• Is it a buy? Maybe not at the current yield, but watch for volatility next week.

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• The 12-month increase of 2.7% was the largest since March 2012.
• Gasoline prices fell in February, moderating overall inflation. But they’re still up 30.7% over the last year.
• Non-seasonally adjusted inflation rose 0.31%, which will boost the principal balances of TIPS in April. One month is left in the I Bond rate-setting period.

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

And here are the new TIPS inflation indexes for April.

• The real yield on a 10-year TIPS has risen 29 basis points in recent weeks.
• At the same time, the inflation breakeven rate has declined – slightly.
• The driving force? A rise in nominal rates, which will nearly always pull the TIPS yield higher.

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• The coupon rate was set at 0.875%, so buyers got it at a discounted price of about $98.76 for $100 of value.
• The inflation breakeven rate came in at 2.13%, higher than recent auctions.
• Market reaction to the auction looks mild, but did the yield come in higher than expected?

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• Year-over-year inflation rose 2.5%, the highest number in nearly five years.
• Gasoline prices rose sharply in January, but core inflation still rose 0.3% without gasoline. The Federal Reserve will take note.
• The report is welcome news for holders of I Bonds and TIPS, reversing a flat inflation index over the last three months.

Real my full analysis at SeekingAlpha.com

Also, I have updated by ‘Tracking Inflation and I Bonds‘ page with these new numbers.

And here are the new March inflation indexes for all Treasury Inflation-Protected Securities.