U.S. Treasury sells $8 billion in TIPS (Treasury Inflation Protected Securities) at 1.920%

July 6, 2009 by · Leave a Comment
Filed under: Industry News 

The Treasury Department sold $8 billion in 10-year Treasury Inflation Protected Securities on Monday at a rate of 1.920%. Bidders offered $2.51 for every dollar of debt offered, the highest so-called bid-to-cover in at least seven years. Indirect bidders, a class of investors that includes foreign central banks, bought 49.7% of the sale. In January, they took 47% of the sale.

The proportion of sales going to indirect bidders appears to have jumped up significantly last month after a change in the way bids are tabulated. TIPS pay investors a coupon plus the rate of inflation, as measured by the consumer price index. Recently, the gap between the yield on TIPS and regular Treasurys was 1.67 percentage points.

Falling equities and fears about the economic outlook kept short-term Treasurys higher. Two-year note yields, which move inversely to prices, fell 4 basis points to 0.94%, the lowest in a month.

Source: MarketWatch

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!