5-Year TIPS Reopening Gets Real Yield Of Only 0.02%

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About: iShares TIPS Bond ETF (TIP), Includes: LTPZ, PBTP, SCHP, SPIP, STIP, STPZ, TDTF, TDTT, TIPX, TIPZ, VTIP, WIA, WIP, WIW
by: Tipswatch
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Tipswatch
Bonds, long-term horizon, I Bonds, TIPS
Summary

This was the lowest real yield for a 4- to 5-year TIPS auction since April 2017, when a new TIPS got a real yield of -0.049%.

The inflation breakeven rate was 1.69%, a reasonable number that was higher than the originating auction's 1.50%. Inflation expectations are rising.

As the 5-year TIPS real yield dips perilously close to negative, investors seeking safety should look for better alternatives: I Bonds or insured bank CDs.

The U.S. Treasury just announced that its $15 billion reopening auction of a 5-year TIPS, CUSIP 912828YL8, generated a real yield to maturity of 0.020%, the lowest for this auction term since April 2017.

This