Current TIPS rate at auction

[cashflo2u2]

I am not real clear on TIPS rates. I am thinking of buying some. Can anyone confirm that this page indicates the TIPS auction next week indicates a base rate of 3.3% for 7 year tips?

Recent Note, Bond, and TIPS Auction Results

 

[LOL!]

Bloomberg.com: Government Bonds seems to confirm those rates, but I am skeptical. [Edit per Peter's post below: Ooops, the 7-year listed is not inflation-protected]

See also St. Louis Fed: Series: DFII7, 7-Year Treasury Inflation-Indexed Security, Constant Maturity This chart does show 7-year TIPS, but real yields are much lower than 2%.

 

[Peter]

Are you sure you're looking at the TIPS auction results? The table in the link shows regular and TIPS notes and bonds.

I see 10 year TIPS with a yield of 2.245% priced at 99.411. The Bloomberg TIPS table shows 10 year TIPS yielding 1.83%, but the price for those notes is 102.18. The lower yield reflects the fact that there would be a capital loss if held to maturity.

This doesn't take into account inflation indexing, of course.

Peter

 

[youbet]

I am not real clear on TIPS rates. I am thinking of buying some. Can anyone confirm that this page indicates the TIPS auction next week indicates a base rate of 3.3% for 7 year tips?

Recent Note, Bond, and TIPS Auction Results

The page you referenced does not list any 7 yr TIPS. In fact, I don't think they were ever issued with 7 yr maturities. Perhaps you're missing the "Type" column which specifies whether they're talking about Treasury Bonds, Notes or TIPS. You're probably reading the row relating to the June 30th, 7 yr Note.

 

[cashflo2u2]

Me bad. You are correct that lists both notes, bonds and tips and I did not focus the type column. I think tip rates are still too low.

 

[windsurf]

Is now a sensible time to buy into the Vanguard TIPS fund? What are the factors? Thank you!

 

[Lawrence of Suburbia]

Is now a sensible time to buy into the Vanguard TIPS fund? What are the factors? Thank you!

It's certainly easier.

I own that one, as well as the TIAA-CREF one in my 403b at work. I've recently fallen under the spell of the writings of Zvi Bodie. Tomorrow it may be the Maharishi Mahesh Yogi, so don't take anything I say too seriously.

Not for all my investments, mind you; maybe 7-8% or so in TIPS.