Market watch bonds
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So a real yield of 0.90% means an investment in this TIPS will exceed U.S. Is it enough to make this offering attractive? Not for me, but it could be for anyone who speculates that real yields will be heading deeply lower in future months.ĭefinition: The “real yield” of a TIPS is its yield above or below official future U.S. However … today’s real yield of about 0.90% is a heck of a lot more appealing than February’s 0.195%.
![market watch bonds market watch bonds](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iStl_MXwycnM/v3/-1x-1.jpg)
probably most appropriate for big-money investors like insurance companies, hedge funds and central banks. Please do your own research before investing.Ī 30-year Treasury Inflation-Protected Security is a potentially volatile investment. The investments he discusses can be purchased through the Treasury or other providers without fees, commissions or carrying charges. He is not selling or profiting from any investment discussed. After that, your comments will automatically appear.ĭavid Enna is a financial journalist, not a financial adviser. If it is your first-ever comment, it will have to wait for moderation.
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I am traveling this week and I am about to go on a trek into Alaska’s Denali National Park, so I will just close with the usual graphs … Real yields, inflation breakeven rate, and auction history.įeel free to post comments or questions below.
![market watch bonds market watch bonds](https://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2014/11/12/102179139-stock-market-board.1910x1000.jpg)
The inflation breakeven rate, by my estimate, was 2.21%. This TIPS will have an inflation ratio of 1.06397 on the settlement date of Aug. Investors paid an adjusted price of about $84.61 for about $106.40 of principal, after accrued inflation is added in. Thursday’s auction demonstrates how much real yields have surged higher in 2022. This TIPS had an originating auction in February, where it got a real yield of 0.195% and a coupon rate of 0.125%. The bid-to-cover ratio was 2.69, also an indication of good demand. It looks like the auction was met with strong demand, with the real yield coming in a few basis points lower than where this TIPS was trading right before the auction’s close. This was the highest yield for any auction of this term in more than 2 years. Treasury’s reopening auction today of CUSIP 912810TE8 - creating a 29-year, 6-month Treasury Inflation-Protected Security - got a real yield to maturity of 0.92%.