Treasury Inflation-Protected Securities

• This new TIPS could have the highest real yield since January 2016, but keep an eye on yield trends – they have been falling.
• The current inflation breakeven rate of 1.78% makes this TIPS attractive versus nominal Treasurys.
• A reason to celebrate? Possibly.

I’m sorry — I have been on vacation this week in rural Wisconsin and had extremely limited Internet! I wrote an article on Sunday for SeekingAlpha.com, but once it was published I was in the dead zone. As of the close Tuesday, it was looking like this new TIPS could go off at 0.50% or lower, and I am losing interest … Keep an eye out, though.

Read my full analysis on SeekingAlpha.com

• Both headline and core numbers for year-over-year inflation have fallen well below the Federal Reserve’s 2.0% target.
• Falling gasoline prices again accounted for the low June number. Used vehicle prices also have been falling.
• What does this mean for investors in TIPS and I Bonds? Possibly lower real yields and a short-term period of mild inflation.

Read my full analysis on SeekingAlpha.com

• Long-term real yields have been declining slightly while short-term yield are rising sharply.
• A yield of 0.88% is very close to this TIPS’ coupon rate of 0.875%. The adjusted price is close to par, when accrued inflation is added in.
• The inflation breakeven rate of 1.84% is attractive — and the reason this auction was greeted with apparent strong demand.

Read my full analysis on SeekingAlpha.com