10-year TIPS auction yield is 2.749%
Thursday, July 12th, 2007
Categorized as: TIPS
The high yield was 2.749% in the Treasury’s 10-year TIPS auction held today.
The actual interest rate that will be paid by the investment is 2.625% (2-5/8%). The price for a $1,000 bond was set at $989.42199.
The bonds will have interest payment days of January 15 and July 15, so investors also have to prepay interest of $0.07134 per bond to cover the interest between July 15 and the bond’s issue date, July 16. This prepayment will be reimbursed to investors in the January interest payment.
Thus the total cost to TreasuryDirect investors will be $989.49333 per bond.
Both the price and yield have been adjusted, using an index ratio of 1.00020, for inflation during the July 15-July 16 period.
TreasuryDirect investors purchased $14,642,000 of the TIPS – about 1.8 tenths of one percent of the total amount invested. This includes both the online and legacy versions of TreasuryDirect.