Htown Harry
Thinks s/he gets paid by the post
- Joined
- May 13, 2007
- Messages
- 1,525
I saw several news items today regarding the latest Treasury auction of TIPS. This one is typical.
Treasury Draws Negative Yield for First Time During TIPS Sale - Bloomberg
I found this chart on the Treasury web page, which indicates the 5-year market yield for TIPS actually went negative about a month ago.
U.S. Treasury - Daily Treasury Yield Curve
Looking at the chart and using my very basic understanding of bond's price yield relationship, I do understand this is just a milestone on a price path, not an event with independent significance. Still, the concept of a negative yield doesn't fully compute for me.
Could some of the more astute bond investors on the board comment and explain the basic math of a negative yield TIPS bond?
Treasury Draws Negative Yield for First Time During TIPS Sale - Bloomberg
I found this chart on the Treasury web page, which indicates the 5-year market yield for TIPS actually went negative about a month ago.
U.S. Treasury - Daily Treasury Yield Curve
Looking at the chart and using my very basic understanding of bond's price yield relationship, I do understand this is just a milestone on a price path, not an event with independent significance. Still, the concept of a negative yield doesn't fully compute for me.
Could some of the more astute bond investors on the board comment and explain the basic math of a negative yield TIPS bond?