TIPS means treasury inflation protected securities. I want to know today's return on inflation-indexed bonds.
2006-06-27 14:56:44 · 2 answers · asked by kirbyguy44 3 in Business & Finance ➔ Investing
The treasury publishes TIPs yields on their web site. The link is below.
2006-06-27 18:22:12 · answer #1 · answered by Ranto 7 · 0⤊ 1⤋
Bloomberg (see link below) has a nice summary page for treasury yields.
TIPS yields appear much lower than regular (non inflation-indexed) treasuries, because the other component of TIPS return (the semi-annual adjustment of capital according to inflation) is not reflected in the yield quote. You can add the 2 numbers (yield and inflation) to get an idea.
Currently, the inflation for the 12 trailing months ending May 06 (CPI) is 4.2%. Maybe this was unusually high. Suppose that we use a conservative estimate of 3% for the coming year. Since the current yield on 5-year TIPS is 2.57, this would mean a return (for the next year) of roughly 5.5%.
2006-06-27 17:38:01 · answer #2 · answered by Flush 2 · 0⤊ 0⤋