TIPS Auctions on Jan. 11 and 23, 2007

January 5, 2007 by TFB

According to the Treasury Department’s Tentative Auction Schedule, there will be an auction for 10-year TIPS on January 11, 2007 and another auction for 20-year TIPS on January 23, 2007. For more information about TIPS and how to buy them, see my previous post:

TIPS: Inflation Linked Bonds

Since the last auction in October 2006 for 5-year TIPS generated a yield of 2.69% (all TIPS yields are real, i.e. on top of inflation), the yield on TIPS dropped to 2.1% level in early December 2006 and then came back up to the current 2.4% level. Because the upcoming auctions are for longer maturity and at a lower yield than last time, I’m going to take a pass and hold out for the next auction for 5-year TIPS currently scheduled on April 24, 2007. If the yield approaches 3.0% then, I will buy some more.

Reference:

RSS feed for daily TIPS yield curve