4/15/2023 TIPS yields 3.85% + inflation

This is an outlier. CUSIP 912828UH1. Fidelity secondary market TIPS.


1 Like

Probably not accurate due to the perturbance of short duration. It matures in a few weeks from now.

4 months. Plenty of short-term bills issued for that duration and shorter.

1 Like

I am missing something. Where do you see 4 months? I see maturity date 1/15/23.

I did however just place an order for these - 9128284H0 at about a 3.8% yield. I had to raise the quantity to 50 to get that price though.

Filled at 99.007. Qty 10 was only 99.045 or so.

Ironically, when I tried qty 100 (the higher ask in fact), it would only give me a worse price, so I just did 50.

1 Like

OOPS, sorry! It’s almost identical to a different TIPS I bought that matures on 4/15/23.

I just purchased another 100 of these at 99.000, for a yield of 3.852%. If I understand correctly it is 3.852% + inflation adjustments between now and 4/15/23. That’s likely to be way higher than a 3 2/3 month treasury bill, where the money would be otherwise.

Am I understanding correctly, or am I way off?

Or does “the market” expect flat inflation between now and 4/15/23? It is indeed possible.

1 Like


Hi MarkR - I’m no expert on interest rates, but a very smart person by the name of mungofitch posted over on Manlobbi’s new board his analysis of future interest rates that you might find informative.



The principal of the TIPS is adjusted to the Consumer Price Index for All Urban Consumers, Not Seasonally Adjusted. This is reported on a month-by-month basis. It’s been very uneven in 2022.

DATE CPIAUCNS % annualized
2021-11-01 277.948
2021-12-01 278.802 3.69%
2022-01-01 281.148 10.10%
2022-02-01 283.716 10.96%
2022-03-01 287.504 16.02%
2022-04-01 289.109 6.70%
2022-05-01 292.296 13.23%
2022-06-01 296.311 16.48%
2022-07-01 296.276 -0.14%
2022-08-01 296.171 -0.43%
2022-09-01 296.808 2.58%
2022-10-01 298.012 4.87%
2022-11-01 297.711 -1.21%

It’s really hard to say what the CPI rate of change will be going forward although it’s clearly lower on average than it was in early 2022.

The 3-month T-bill is currently yielding over 4%.

The median Percent Change from Year Ago is still high but that doesn’t take into account the sudden slowdown of the month-over-month rate which even has some negative months in late 2022.

Will the 3.5 month TIPS yield more than the 3 month Treasury? I would say certainly…unless there is unexpected deflation.


1 Like

Now I’m less sure. Because of that November number! I’ve read that the inflation adjustments are somewhat delayed for TIPS … by 6 months or so?

I guess we will see. But the difference will almost definitely be low, and the bias is likely still higher on the TIPS option. But I always think it is important to realize that the market is rational, and since the bond market is huge, it has many participants, and the price of any bond is the aggregate average of what they all think will happen in the future … in this case through 4/15/23.

They are delayed by 3 months.

1 Like

There’s got to be some sort of short duration perturbance going on here. On Fidelity, at the bid, it is now listed as having a yield of 6.247%!

By the way, for anyone who is not convinced that inflation will be whipped (anyone remember “WIN”?) in the first half of next year, there are some really good deals on TIPS in the secondary market. I’ve been snapping some of them up every few days when the ask comes down appropriately. I could be wrong, but the worst that’ll happen is that I may gey a yield slightly lower than the government money market the funds would be in otherwise.


A question about the mechanics of this at maturity.
Does the money just go into your account at that point? Or do you need to sell the bond?

1 Like

When a bond has a coupon, usually every half year, the interest payment is deposited into the account holding that bond. When the bond matures, you get both the last interest payment, and the entire principal value deposited into your account.

There is no need to sell a maturing bond.


Thanks. I thought TIPS (especially secondary market) might be different than regular bonds.
I was thinking they might continue to pay their nominal interest (without inflation adjustments) after maturity.
Sounds like there might be some bargains to be had.


I think some savings bonds may do that.

@Neuromancer @zippy42
No bonds pay interest after maturity. The meaning of “maturity” is “the date of the last interest payment.” On that date, the principal and last interest payment are returned to the bond owner in cash. This is true of TIPS and I-Bonds as well as other bonds.

A major issue in choosing a bond is the fact that the cash that is returned at maturity must be re-invested. If interest rates have fallen since the original bond was bought there may be no way to get the income at the same level of risk.

An example is the TIPS I bought in October 2008 during the financial crisis. The bond market locked up. For the first time in history, TIPS yielded more than Treasuries of the same maturity. I bought 10 year TIPS (on the secondary market) yielding 3% over the inflation rate. That yield has not been seen since. When those TIPS matured in 2018 I couldn’t replace them at anywhere near the same yield.

The same is true of the I-Bonds I bought in September 2001 which yield 3% plus inflation. When they mature in September 2031 it’s very unlikely that I will be able to find an equivalent investment (in terms of inflation-adjusted yield and safety).


1 Like

I suspect he’s thinking of series ee savings bonds. Those do not pay periodic interest. They also have an initial maturity where they reach their face value, and a final maturity when the stop accruing interest.

But they are the oddball among longer term Treasury securities, not the norm.



Yes E! I think they mature, double to face value, after 20 yrs and then if you don’t cash them in can earn interest for another 10 years. Rate is a joke though.

1 Like

CUSIP 9128284H0

Since these TIPS just matured a few days ago, I figured I would update the post with the results of the investment/trade.

I purchased on 12/21, some at 99.000 and some at 99.007, the IRR at maturity on 4/17/23 was 6.36%. That’s not terrible for a fixed income investment of just under 4 months with inflation running at about 3.5% (?) during that period.