Friday, July 29, 2011

20-Year TIPS Real Rate

The 20-year TIPS just hit a new low of 1.14%.

This is the bond market's way of saying that weak real GDP growth is going to be with us for a very, very long time.

For what it is worth, it is also my way of heckling
Jeremy Siegel.

I have a theory. Treasury Inflation Protected Securities tried to run over Jeremy Siegel's dog. What else could possibly explain his ongoing hatred of them? Well, other than the fact they've made him look like a fool for the past decade by outperforming his precious stocks.

Source Data:
FRB: Selected Interest Rates
US Treasury: Real Yields

1 comment:

Stagflationary Mark said...

Trivia Time

Jeremy Siegel warned investors to avoid long-term TIPS when the 20-year TIPS yielded 1.82%.

The best time in 2011 to buy the 20-year TIPS was 6 trading days after Jeremy Siegel warned. You could have gotten 1.98% and locked it in for 20 years.

If you want to lock it in now, you'll only get 1.14% though.

Dangerous advice indeed.