Thank You, Janet Yellen: New 10-Year TIPS Auctions With A Real Yield Of 0.436%

Posted on January 19, 2017 by Tipswatch

Summary

  • TIPS yields rose Wednesday after Fed Chair Yellen signaled more interest rate increases are coming.
  • Investors at today’s auction got a boost in yield, the highest in a year.
  • The 10-year inflation breakeven rate hit 2.044%, signaling that TIPS are no longer ‘cheap’ versus nominal Treasurys.

Read my full analysis on SeekingAlpha.com

Posted in Investing in TIPS | 6 Comments

U.S. Inflation Rose 0.3% In December; Up 2.1% Over Last 12 Months

Posted on January 18, 2017 by Tipswatch

Summary

  • News is not good for I Bond investors: Inflation is flat over first three months of rate-setting period.
  • Year-over-year ‘headline’ inflation broke through the 2.0% barrier for the first time since June 2014.
  • Core inflation rose 2.2% in 2016, above the Federal Reserve’s target of 2.0%.

Read my full analysis on SeekingAlpha.com

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

And here are the new CPI Indexes for TIPS in February.

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Coming January 19: Treasury Will Auction A New 10-Year TIPS, One Worth Watching

Posted on January 12, 2017 by Tipswatch

Summary

  • A week away, the yield to maturity is estimated at 0.39%, not awful but also not really attractive.
  • The inflation breakeven rate of 1.99% indicates TIPS are no longer ‘cheap’ versus nominal Treasurys.
  • Looking ahead: 5 more auctions of this maturity in 2017.

This is a particularly interesting auction because it is the first new-issue TIPS since the election of Donald Trump on November 8 set off turmoil in the Treasury market.

Read my preview and analysis on SeekingAlpha.com

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I Bond Investors: Here’s Your Buying Guide For 2017

Posted on January 9, 2017 by Tipswatch

Summary

  • Advice: Do nothing for three months.
  • The current 2.76% variable rate is at risk, but the current fixed rate of 0.0% is too low.
  • It’s a waiting game: Watch the variable rate trend and hope for a higher fixed rate later in 2017.

U.S. Series I Savings Bonds are a boring, ultra-conservative investment that somehow drive many people – including a lot of very wealthy people – to scheme over buying strategies and fret over single basis-point rate swings. The key strategy is to buy them every year, up to the Treasury limit. But the question is: When?

Read my full analysis at SeekingAlpha.com

Posted in Investing in TIPS | 4 Comments

Recapping 2016: The Year In Treasury Inflation-Protected Securities

Posted on January 3, 2017 by Tipswatch

Summary

  • TIPS yields started and ended the year at relatively high levels, but dipped at midyear.
  • TIPS outperformed the overall bond market as inflation expectations rose, increasing demand for TIPS and softening increases in yield.
  • Are today’s higher yields a head-fake, or a signal of buying opportunities to come?

Treasury Inflation Protection Securities had a promising beginning of 2016 for investors, then a serious slump in yields at midyear, and then a promising rise in yields again after the November elections.

What can we expect in 2017?

Read my full analysis at SeekingAlpha.com

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