5-Year TIPS Reopening Auction Arrives in a Volatile Week
The U.S. Treasury will auction $24 billion of a reopened 5‑year Treasury Inflation‑Protected Security (CUSIP 91282CQP9) on Thursday, creating a 4‑year, 10‑month TIPS. Real yields have surged 71 basis points since the Feb. 28 Middle‑East conflict, now hovering around 1.79% despite a recent high of 2.59% in October 2023. The security trades at a secondary‑market price of 97.51, implying a cost of roughly $9,959 for $10,213 of inflation‑adjusted principal. The auction occurs a day after the Fed’s policy meeting, adding potential volatility to the final yield.
Academic Study: I Bonds Out-Perform High-Yield Savings Accounts
An academic study finds Treasury I Bonds have generated higher net returns than the nation’s leading high‑yield savings accounts, even after accounting for the six‑month early‑withdrawal penalty. The research also notes that investors can sidestep the $10,000 annual purchase cap through...
TIPS Values Exist in a Multiverse: What’s the Correct Reality?
The article examines how investors value Treasury Inflation‑Protected Securities (TIPS), I‑Bonds, CDs, and whole‑life insurance policies, emphasizing the need for present‑value calculations that adjust for inflation and future cash flows. It notes that most practitioners, including the author, avoid selling...
IShares Target-Date TIPS ETFs Are Growing in Appeal … and Deserve a Look
iShares’ defined‑maturity Treasury Inflation‑Protected Securities (TIPS) ETFs are gaining traction among investors seeking inflation protection without the hassle of managing individual bonds. These products bundle a ladder of TIPS that mature in a specific year, offering a single‑ticker solution that...
10-Year TIPS Auction Gets Real Yield of 2.169% to Soft Demand
The U.S. Treasury’s 10‑year Treasury Inflation‑Protected Securities (TIPS) auction posted a real yield of 2.169%, signaling softer demand than in recent weeks. The higher yield suggests investors are pricing in elevated inflation expectations despite modest auction participation. Financial advisers continue...
Energy Shock Sends U.S. Inflation to a Three-Year High
A sharp rise in oil prices has pushed U.S. inflation to its highest level in three years, with headline CPI climbing to 3.2% year‑over‑year and core CPI reaching 3.0%, the strongest pace since 2021. The surge is feeding through to...
I Filled Out the Top End of My TIPS Ladder Last Week
An investor recently completed a Treasury Inflation‑Protected Securities (TIPS) ladder that ends in October 2028, noting that current pricing reflects at least 3% inflation expectations. iShares has expanded the market with the launch of IBIM, a TIPS‑focused ETF that matures in 2036,...
Treasury Holds I Bond Fixed Rate at 0.90%; Composite Rate Rises to 4.26%
The U.S. Treasury announced that the fixed rate for new Series I Savings Bonds remains at 0.90%, while the composite rate—combining the fixed portion with the inflation‑adjusted component—rose to 4.26% for the current six‑month period. The increase reflects a higher...
TreasuryDirect, Ditch the ‘Gift Box’ and Raise the I Bond Purchase Cap
TreasuryDirect has sent a new email urging holders of Series I Savings Bonds in the gift‑box program to deliver their bonds promptly. The notice clarifies that while only one gift bond can be delivered at a time, recipients can receive unlimited...
5-Year TIPS Auction Gets a Real Yield of 1.367%
On Tuesday, the U.S. Treasury auctioned 5‑year Treasury Inflation‑Protected Securities (TIPS) with a real yield of 1.367%, marking a modest increase over the prior auction. The offering attracted robust demand, pulling in roughly $38 billion in bids from both domestic and...
Here Comes a Rather Unexciting 5-Year TIPS Auction
The Treasury will conduct a routine five‑year Treasury Inflation‑Protected Securities (TIPS) auction, with market consensus that the fixed coupon will stay at roughly 0.9% after the May reset. Investors, including newcomers to the TIPS market, are planning to submit bids...
I Bond Dilemma: Buy in April or Just Keep Waiting?
Investors are debating whether to buy Treasury Series I Savings Bonds in April or wait for potentially higher variable rates later in the year. The discussion highlights the bond's dual‑interest structure— a fixed rate set at issuance and a semi‑annual...
March Inflation Sets I Bond’s New Variable Rate at 3.34%
The Treasury announced that the March Consumer Price Index has set the new I Bond variable rate at 3.34% annualized, reflecting a modest slowdown in six‑month inflation. This rate applies to all newly issued I Bonds and will be combined with the...
A 5-Year TIPS Is Maturing April 15. How Did It Do as an Investment?
A five‑year Treasury Inflation‑Protected Security (TIPS) that matured on April 15 delivered a modest real return, lagging behind comparable Series I Savings Bonds. The bond’s real yield had been negative for much of its life, eroding its inflation‑hedge advantage. Despite...
I Bond’s Fixed Rate Is Likely to Hold at 0.90% at May 1 Reset
U.S. Treasury I‑Bonds are expected to keep their fixed component at 0.90% when the next rate reset occurs on May 1, leaving the composite yield at 4.03% for the full six‑month period. The stable fixed rate preserves the bond’s attractive inflation‑adjusted...