10-year TIPS reopening auction gets real yield of 1.843% to lukewarm demand

Posted on November 20, 2025 by Tipswatch

By David Enna, Tipswatch.com

The Treasury’s reopening auction today of a 10-year TIPS, CUSIP 91282CNS6, generated a real yield to maturity of 1.843% for its 9-year, 8-month term. That result was above the “when-issued” market prediction of 1.824%, which indicates investor demand wasn’t strong.

I had speculated that investors would be wary of this auction because inflation accruals for all TIPS have not been set for the month of December, just 12 days away. This may not be Earth-shaking, but it is unprecedented. Read about that here: “This week’s 10-year TIPS auction will be a test case for uncertainty.”

However, the bid-to-cover ratio for this auction was 2.41, which is a fairly normal result. So demand was probably lukewarm, not disastrous.

CUSIP 91282CNS6 trades on the secondary market, and earlier this morning it was trading with real yields in a range of 1.81% to 1.82%. So the auction result of 1.843% clearly showed investors demanded a higher-than-market yield for the $19 billion offering.

That’s a good result for investors.

Definition: The “real yield to maturity” of a TIPS is its yield above official future U.S. inflation, over the term of the TIPS. So a real yield of 1.843% means an investment in this TIPS would provide a return that exceeds U.S. inflation by 1.843% for 9 years, 8 months.

Here is the trend in the 10-year real yield over the last 2 1/2 years, showing the rather dramatic swings, potentially indicating a lack of confidence in the U.S. Treasury market overall:

Click on image for larger version.

Pricing

Because the auctioned real yield of 1.843% was a bit below the coupon rate of 1.875%, this TIPS was priced at a slight premium — an unadjusted price of 100.279542. It also will carry an inflation index of 1.01127 on the settlement date of Nov. 28. With that information, we can calculate the cost of a $10,000 par value investment at this auction:

  • Par value: $10,000.
  • Principal as of settlement date: $10,000 x 1.01127 = $10,112.70.
  • Cost of investment: $10,112.70 x 1.00279542 = $10,140.97.
  • + accrued interest of $70,07.

In summary, an investor purchasing $10,000 par value of this TIPS will pay $10,140.97 for $10,112.70 in principal as of the Nov. 28 settlement date. From then on, the investor will earn accruals matching future U.S. inflation, plus an annual coupon rate of 1.875% on inflation-adjusted principal. The accrued interest will be returned at the first coupon payment on Jan. 15, 2026.

Inflation breakeven rate

At the auction’s close, a nominal 10-year Treasury note was trading with a yield of 4.00%, giving this TIPS an inflation breakeven rate of 2.16%, well below recent trends. This would seem to indicate the market is pricing in weakness in the U.S. economy (and resulting lower inflation), or could simply be an outlier caused by the uncertainty over the accuracy of future inflation indexes.

Here is the trend in the 10-year inflation breakeven rate over the last 2 1/2 years:

Thoughts

The value of any TIPS at maturity (and to a great extent on the secondary market) is based on this calculation:

Par value x inflation index

The Treasury sets inflation indexes for every day of the year, which allows TIPS to be priced properly at all times on the secondary market. See the indexes for November.

The last reference inflation index for any TIPS is for November 30 at 324.77253, which was determined by the September CPI report. The December indexes would have been set by the October inflation report, which doesn’t exist. The Treasury will need to do some sort of workaround, and reveal the results very soon.

So today’s auction was staged in a vacuum, lacking full information about values for December 1 and beyond. The effect will be quite small in the short term but financial markets don’t like uncertainty.

Investors at today’s auction probably got a bit higher yield because of the uncertainty.

Here are recent results for 9- to 10-year TIPS auctions:

• Now is an ideal time to build a TIPS ladder

• Confused by TIPS? Read my Q&A on TIPS

• TIPS in depth: Understand the language

• TIPS on the secondary market: Things to consider

• TIPS investor: Don’t over-think the threat of deflation

• Upcoming schedule of TIPS auctions

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Donate? This site is free and I plan to keep it that way. Some readers have suggested having a way to contribute. I would welcome donations. Any amount, or skip it, your choice. This is completely optional.

PayPal link / Venmo link

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Follow Tipswatch on X for updates on daily Treasury auctions and real yield trends (when I am not traveling).

Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear. Please stay on topic and avoid political tirades. NOTE: Comment threads can only be three responses deep. If you see that you cannot respond, create a new comment and reference the topic.

David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.

Posted in Inflation, Investing in TIPS | Tagged , | 6 Comments

This week’s 10-year TIPS auction will be a test case for uncertainty

Posted on November 16, 2025 by Tipswatch
AI image for “investor facing inflation uncertainty.” Perchance.org.

By David Enna, Tipswatch.com

The U.S. Treasury on Thursday will auction $19 billion in a reopened 10-year Treasury Inflation-Protected Security, CUSIP 91282CNS6, creating a 9-year, 8-month TIPS. This will be especially interesting because it will be the first-ever TIPS auction with an initial month of inflation accruals based on uncertain statistics.

The uncertainty is the direct result of the 43-day U.S. government shutdown, which furloughed all but one employee of the Bureau of Labor Statistics. No inflation data were collected in October, and at this point no inflation index has been set for non-seasonally adjusted inflation in October. That index will be the basis of December inflation accruals for all TIPS.

The end result is that the BLS or Treasury will have to employ some sort of workaround to define an October inflation index, as I discussed in this posting: “Nov. 13, 2025: The Inflation Day that wasn’t.” The workaround will probably result in a monthly inflation number of about 0.25%, probably close to reality, but no one is going to know for certain.

Let’s hope the Treasury announces a calculated October inflation index before Thursday’s auction. It will have to name a number before December 1 to allow proper pricing of TIPS on the secondary market.

How is the market going to react to this uncertainty? We will find out Thursday.

CUSIP 91282CNS6 had an originating auction on July 24, 2025, which generated a real yield to maturity of 1.985% and a coupon rate at 1.875%. Since then, real yields have declined a bit. This TIPS closed Friday on the secondary market with a real yield of 1.83%.

The secondary market is already pricing in the “October inflation uncertainty” so it should be a fairly good indicator of Thursday’s auction result. But a lot can change before Thursday, and $19 billion in an auction offering could be a lot for a shaky market to absorb.

Here is the trend in the 10-year real yield over the last 15 years, showing the recent decline as the U.S. economy appears to be weakening and the Federal Reserve ponders a series of future rate cuts. However, a real yield of 1.83% remains historically attractive:

Click on image for larger version.

Pricing

CUSIP 91282CNS6 closed Friday with a real yield to maturity of 1.83% and a price of 100.39 — at a slight premium because the real yield is now below the coupon rate of 1.875%. Also, on the settlement date of Nov. 28, this TIPS will carry an inflation index of 1.01127.

With that information, we can estimate the cost of a $10,000 par investment in this TIPS, based on Friday’s close:

  • Par value: $10,000.
  • Principal purchased as of Nov. 28: $10,000 x 1.01127 = $10,112.70
  • Cost of investment: $10,112.70 x 1.0039 = $10,162.18.
  • + accrued interest of about $70.07.

In summary, an investor at Thursday’s auction might pay around $10,162 for $10,112.70 of principal on the settlement date of Nov. 28. From then on, the investor will earn inflation accruals matching future inflation, plus an annual coupon rate of 1.875%. The accrued interest will be returned at the first coupon payment on Jan. 15, 2026.

This is an estimate based on Friday’s close. Market conditions will change by Thursday’s auction, but this can be a guide for investors.

Inflation breakeven rate

Because the nominal 10-year Treasury note closed Friday with a yield of 4.15%, CUSIP 91282CNS6 currently has an inflation breakeven rate of 2.32%, in line with recent auctions of this term. This means the TIPS will outperform the nominal Treasury if inflation averages more than 2.32% over the next 9 years, 8 months.

Here is the history of the 10-year inflation breakeven rate over the last 15 years, showing that inflation expectations have been holding well above 2.0% since the summer of 2021:

click on image for larger version.

Thoughts

I’ve been hearing from a lot of readers who intend to sit out TIPS investments until we get some certainty on accurate inflation numbers. That won’t come this week. Investors are going to have to accept at least one month (December) of iffy inflation accruals. It’s not a huge deal, but it is still a deal.

I won’t be an investor because I am still targeting the Jan. 22, 2026, auction of a new 10-year TIPS, to fill the 2036 rung on my TIPS investment ladder. So far, getting a fairly good real yield looks likely.

Some people may want to dip into this auction with the theory that the current uncertainty could result in weak demand and a strong real yield. That’s a possibility, but impossible to predict. Investors can use Bloomberg’s Current Yields page to see how CUSIP 91282CNS6 is trading in real time, but Thursday’s auction could swing in another direction.

This TIPS auction closes Thursday at 1 p.m. EST. Non-competitive bids at TreasuryDirect must be placed by noon Thursday. If you are putting an order in through a brokerage, make sure to place your order Wednesday or very early Thursday, because brokers cut off auction orders before the noon deadline.

Of course, there is no requirement to buy at the auction since this TIPS trades on the secondary market. The advantage of buying at auction, especially through TreasuryDirect, is that even small-lot purchases will get the auction’s high yield.

The advantage of the secondary market is that you can see exactly the price and real yield you will be receiving. The negative is that you may face a small bid-ask spread. Most of the time, it doesn’t make a huge difference, but this auction could be an exception.

I will be posting the auction results on Thursday soon after the 1 p.m. ET close. Here are results of 9- to 10-year TIPS auctions over the last 5 years:

• Confused by TIPS? Read my Q&A on TIPS

• TIPS in depth: Understand the language

• TIPS on the secondary market: Things to consider

• TIPS investor: Don’t over-think the threat of deflation

• Upcoming schedule of TIPS auctions

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Donate? This site is free and I plan to keep it that way. Some readers have suggested having a way to contribute. I would welcome donations. Any amount, or skip it, your choice. This is completely optional.

PayPal link / Venmo link

—————————

Follow Tipswatch on X for updates on daily Treasury auctions and real yield trends (when I am not traveling).

Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear. Please stay on topic and avoid political tirades. NOTE: Comment threads can only be three responses deep. If you see that you cannot respond, create a new comment and reference the topic.

David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.

Posted in Inflation, Investing in TIPS, TreasuryDirect | Tagged , , | 10 Comments

Nov. 13, 2025: The Inflation Day that wasn’t

Posted on November 14, 2025 by Tipswatch
Kinkaku-ji, Kyoto’s “Golden Pavillion,” first constructed in 1399, rebuilt in 1955.

By David Enna, Tipswatch.com

I am writing this from a hotel room in Kyoto, Japan, 14 hours ahead of Eastern Standard Time. Today is Friday. I believe it is also Friday (but very early) in the United States.

After 43 days of political nonsense, the U.S. government shutdown has now ended, which means I probably will be able to fly home next week. It also means that collecting very important economic statistical data can begin again.

The White House said this week that September and October jobs reports may never be released, even though data were collected for September before the shutdown. The same is true for the October inflation report, since no price data was collected for that month.

White House press secretary Karoline Leavitt announced this while taking one last shot (actually, probably not the last) at Democrats. From Politico:

“Democrats may have permanently damaged the federal statistical system with October CPI and jobs reports likely never being released,” Leavitt told reporters. “All of that economic data released will be permanently impaired, leaving our policy makers at the [Federal Reserve] flying blind at a critical period.”

Kevin Hassert, President’s Trump’s top economic adviser, later clarified that October jobless data will eventually be released, but without an official unemployment rate figure. “That’ll be for just one month,” he said.

The inflation report

Since no price data were collected last month, there is no way to produce a conventional inflation report for October. Nevertheless, a sort-of-official calculated CPI number will have to be announced, and soon, because that will determine inflation accruals for Treasury Inflation-Protected Securities in December, just 17 days away.

Those daily inflation indexes (such as these for November) are crucial for pricing TIPS in the secondary market. Without some sort of index, traders won’t be able to value TIPS accurately. And since we will be getting a calculated CPI estimate, the TIPS market is going to feel some turbulence.

The Bureau of Labor Statistics has posted this note on its site:

BLS will announce revised news release dates on this page as they become available. We appreciate your patience while we work to get this information out as soon as possible, as it may take time to fully assess the situation and finalize revised release dates.

Without the October inflation report the Treasury will probably rely on a calculated non-seasonally adjusted inflation number for October, as noted in the Code of Federal Regulations. 

If the CPI-U for a particular month is not reported by the last day of the following month, we will announce an index number based on the last 12-month change in the CPI-U available. Any calculations of our payment obligations on the inflation-indexed savings bonds that rely on that month’s CPI-U will be based on the index number that we have announced.

The exact formula is a bit complicated for a lowly journalist, as you can see here:

I am going to guess the October inflation number will end up being around 0.25% based on this 12-month calculation. The October CPI index should be something around 325.6. We’ll see.

The BLS or Treasury will need to announce something soon because the TIPS market will get shaken without data on future market values.

In a report on October 25, Bloomberg speculated on unease in the TIPS market because of potentially inaccurate inflation indexes in December:

The segment of the US Treasury market that offers investors protection against rising consumer prices is headed for uncharted waters …

Jonathan Hill, head of US inflation strategy at Barclays Capital Inc., said the lack of data or questionable data will create stresses in the TIPS market:

If the October CPI isn’t published by the end of November, “the fallback comes into effect,” not just for TIPS but also for inflation swaps, derivative contracts in which a floating interest rate is exchanged for a CPI-based payment, Hill said. “It’s something that’s never come into effect before.”

Even if the data are published on time, doubts about its quality may create volatility, Hill said. …

Interest-rate strategists at Morgan Stanley said in a report this week that “concerns over deteriorating CPI data quality” related to “weaker data collection amid the government shutdown may be weighing on investor demand” for the $2 trillion TIPS market.

It’s worth noting that the real yield of a 10-year TIPS has been holding fairly steady during this shutdown crisis — falling from 1.87% on September 2 to 1.83% at the close on Thursday. During that same period, the nominal yield of a 10-year Treasury note fell from 4.28% to 4.11%. So it is possible that uneasiness over accurate inflation accruals is having an effect on the TIPS market.

Thursday’s reopening auction of a 10-year TIPS — CUSIP 91282CNS6 — should give us some idea of market demand. I plan on posting a preview to that auction sometime on Sunday (or whatever time it is in Japan).

Eventually, when the November and December inflation reports are released based on standard collection of data, the inflation numbers should return to accuracy. This should be — we hope – only a temporary disruption of the TIPS market.

But the continuing resolution only extends government funding to January 30. Will this damaging game start again in 2026?

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This image has an empty alt attribute; its file name is tips4.jpg

Donate? This site is free and I plan to keep it that way. Some readers have suggested having a way to contribute. I would welcome donations. Any amount, or skip it, your choice. This is completely optional.

PayPal link / Venmo link

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Follow Tipswatch on X for updates on daily Treasury auctions and real yield trends (when I am not traveling).

Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear. Please stay on topic and avoid political tirades. NOTE: Comment threads can only be three responses deep. If you see that you cannot respond, create a new comment and reference the topic.

David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.

Posted in Inflation, Investing in TIPS | Tagged , , , | 11 Comments

Treasury sets I Bond fixed rate at 0.9%, composite rate of 4.03%

Posted on October 31, 2025 by Tipswatch

By David Enna, Tipswatch.com

There were no surprises in this morning’s announcement of the new fixed and composite rates for U.S. Series I Bonds purchased from November 2025 to April 2026. Treasury followed its past practices, setting the fixed rate at 0.9%, as I projected.

This is a very good thing.

It is important because the Trump administration’s Treasury department continued to follow our “perceived” formula for the fixed rate: Applying a ratio of 0.65 to the average real yield of the 5-year TIPS over the last six months. This formula has worked, without fail, for 12 fixed-rate resets since November 2017.

Can we be sure this will continue to work? No, but it is reassuring to see past practices continued.

The fixed rate is permanent for the life of the I Bond, so it is a key factor in the attractiveness of this investment. While the fixed rate dropped from 1.10% to 0.90% at this reset, getting a guaranteed return of 0.90% above inflation will remain attractive for investors heading into 2026, as short-term Treasury yields continue to decline.

The composite rate

The I Bond’s composite rate is created by combining the fixed rate with an inflation-adjusted variable rate set by inflation over the last six months, in this case for the months of April through September. The current variable rate of 3.12% will apply to all I Bonds, no matter when they were issued.

Here is how the Treasury calculates the composite rate in a formula that combines the fixed rate and current variable rate.

This calculation is for I Bonds issued from November to April. For investors who purchased I Bonds earlier this year with a fixed rate of 1.10%, the new composite rate will be 4.23%. The new rates roll in for six months, depending on the month of the original purchase.

I Bonds remain attractive

New investors through April 2026 will be getting a six-month annualized return of 4.03%, which will be competitive with short-term Treasury bills, with yields that have already fallen below 4% and are likely to continue to decline as the Federal Reserve cuts short-term rates into 2026.

Of course, I Bonds must be held one year (technically about 11 months) before being redeemed, and any redemption before 5 years gets hit with a 3-month interest penalty. For I Bonds with an attractive fixed rate — and 0.90% is attractive — I suggest holding for five years and then redeeming when you need the cash.

Yes, your older I Bonds with fixed rates of 0.0% or 0.1% are less attractive. But even with these you will be earning above 3% over the six months.

I Bonds work well as a secondary emergency fund, constantly adjusting to inflation. There are no state income taxes, and the value of the investment can never decline with “market trends.”

EE Bonds

EE Savings Bonds purchased from November to April will have a fixed rate of interest of 2.5%, down from 2.7% for purchases in October. But Treasury continued is terms that double the value of EE Bonds if held for 20 years:

For EE bonds you buy now, we guarantee that the bond will double in value in 20 years, even if we have to add money at 20 years to make that happen.

At this point — unless short-term rates decline drastically — it is hard to argue that EE Bonds are an attractive investment. You can get about 4.64% on a 20-year Treasury bond.

Travel update

I am writing this from the Atlanta airport, about to get on a 14-hour flight to Seoul, South Korea. I will be “out of pocket” but feel free to discuss these developments in the comments section.

• Confused by I Bonds? Read my Q&A on I Bonds

• Let’s ‘try’ to clarify how an I Bond’s interest is calculated

• Inflation and I Bonds: Track the variable rate changes

• I Bonds: Here’s a simple way to track current value

• I Bond Manifesto: How this investment can work as an emergency fund

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Donate? This site is free and I plan to keep it that way. Some readers have suggested having a way to contribute. I would welcome donations. Any amount, or skip it, your choice. This is completely optional.

PayPal link / Venmo link

—————————

Follow Tipswatch on X for updates on daily Treasury auctions and real yield trends (when I am not traveling).

Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear. Please stay on topic and avoid political tirades. NOTE: Comment threads can only be three responses deep. If you see that you cannot respond, create a new comment and reference the topic.

David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.

Posted in Cash alternatives, EE Bonds, I Bond, Inflation, TreasuryDirect | 16 Comments

My schedule … and I have a problem

Posted on October 29, 2025 by Tipswatch
An image from “KPop Demon Hunters,” a Korean-inspired film that is the most-watched original offering in Netflix history. I tried to watch it, twice, and failed. Possibly I am “too old.”

By David Enna, Tipswatch.com

Long-time readers know when I use a headline that starts with “My schedule” it means I will be traveling to distant places. And that is true again, starting Friday morning when I will be off to Seoul, South Korea, and then Japan.

Friday morning! This is the time when the I Bond’s new fixed and composite rates will be announced. That’s a big event for Tipswatch.com. I mark these dates on our calendar every year, to avoid any travels. But this is a family trip and the dates suddenly changed, and … I am going.

TreasuryDirect has hinted it may announce the new rates at 12:01 a.m. on Friday, and if that is true, I will succeed in writing an article and updating the site’s various I Bond pages. Normally, however, the announcement comes later in the morning.

While I am gone, I will be 12 hours ahead of U.S. eastern time on Saturday and then 13 hours ahead once daylight savings time ends Sunday morning. (Both South Korea and Japan don’t observe daylight savings time.) I won’t be able to follow U.S. financial news closely and I won’t be able to quickly answer questions posted in the comments.

Here is what is coming up:

Today, 2 p.m. The Federal Reserve will announce its latest rate-cutting decision, which will be to lower the federal funds rate to a range of 3.75% to 4.00%. I won’t write about this but I will be watching for omens of future cuts.

Friday, Oct. 31. As I noted above, Treasury will announce the I Bond’s new fixed rate, variable rate and composite rate sometime in the morning. I have been forecasting the fixed rate at 0.9%, the variable rate at 3.12% and composite rate at 4.03%. Time will tell. At some point I will update the site with possibly very old news.

Thursday, Nov. 13. We are supposed to get an inflation report for October on this date, but the White House has signaled there will be no report because no data have been collected during the government shutdown. Eventually (possibly on this date) Treasury will announce a “calculated” CPI index number for October, based on inflation over the last 12 months. This is from the Code of Federal Regulations:

If the CPI-U for a particular month is not reported by the last day of the following month, we will announce an index number based on the last 12-month change in the CPI-U available. Any calculations of our payment obligations on the inflation-indexed savings bonds that rely on that month’s CPI-U will be based on the index number that we have announced.

This substitute CPI technique is almost certainly going to be applied. It is most crucial for Treasury Inflation-Protected Securities, because it will set daily inflation accrual indexes for December. (When – or if – a real CPI number is released for November, the accruals will more or less auto-adjust to reality.)

All of this will be very interesting and I hope to find time to write about it.

Sunday, Nov. 16. I will post a preview article about the reopening auction of CUSIP 91282CNS6, creating a 9-year, 8-month TIPS. At this point that TIPS is trading on the secondary market with a real yield of 1.68%. It will be interesting to see if Federal Reserve rate cuts push the yield lower (or higher).

Thursday, Nov. 20. I will be just back in the United States after about 24 hours of travel time and I will attempt to write an article on the 10-year TIPS auction result. Expect multiple errors and nonsensical sentences. But I’ll try.

As I prepare to depart, I will leave with with the trailer for “KPop Demon Hunters.” The film has a 95% Rotten Tomatoes score, and has had two of its songs go Number One globally. My pet sitter says, “I am obsessed with this film.” I am sure many of you will love it:

Meanwhile, forgive my delays in answering your questions in the comments and email.

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Donate? This site is free and I plan to keep it that way. Some readers have suggested having a way to contribute. I would welcome donations. Any amount, or skip it, your choice. This is completely optional.

PayPal link / Venmo link

—————————

Follow Tipswatch on X for updates on daily Treasury auctions and real yield trends (when I am not traveling).

Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear. Please stay on topic and avoid political tirades. NOTE: Comment threads can only be three responses deep. If you see that you cannot respond, create a new comment and reference the topic.

David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.

Posted in Federal Reserve, I Bond, Inflation, Investing in TIPS | Tagged , | 23 Comments