Long term Treasuries soaring!
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Long term Treasuries soaring!
Surprised this topic doesn’t exist yet.
EDV up 1.6% today. Doing its job of stock crash insurance.
EDV up 1.6% today. Doing its job of stock crash insurance.
Re: Long term Treasuries soaring!
Shorter term inverse correlation, mid/longer term correlates?CletusCaddy wrote: ↑Fri Jan 21, 2022 6:24 pm Surprised this topic doesn’t exist yet.
EDV up 1.6% today. Doing its job of stock crash insurance.
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Re: Long term Treasuries soaring!
I think the data shows during normal times there is zero correlation. During stock crashes there is negative correlation.seajay wrote: ↑Fri Jan 21, 2022 6:29 pmShorter term inverse correlation, mid/longer term correlates?CletusCaddy wrote: ↑Fri Jan 21, 2022 6:24 pm Surprised this topic doesn’t exist yet.
EDV up 1.6% today. Doing its job of stock crash insurance.
Re: Long term Treasuries soaring!
Think the soaring will continue next week?
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Re: Long term Treasuries soaring!
According to Morningstar EDV had a return of -6.20% in 2021 and YTD is -3.49%.
https://www.morningstar.com/etfs/arcx/edv/performance
https://www.morningstar.com/etfs/arcx/edv/performance
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
Re: Long term Treasuries soaring!
This is true over the last ~40 years. Not so much before then.CletusCaddy wrote: ↑Fri Jan 21, 2022 6:38 pmI think the data shows during normal times there is zero correlation. During stock crashes there is negative correlation.seajay wrote: ↑Fri Jan 21, 2022 6:29 pmShorter term inverse correlation, mid/longer term correlates?CletusCaddy wrote: ↑Fri Jan 21, 2022 6:24 pm Surprised this topic doesn’t exist yet.
EDV up 1.6% today. Doing its job of stock crash insurance.
Re: Long term Treasuries soaring!
So -12% with inflation, before taxes : (TheTimeLord wrote: ↑Sat Jan 22, 2022 12:00 am According to Morningstar EDV had a return of -6.20% in 2021 and YTD is -3.49%.
https://www.morningstar.com/etfs/arcx/edv/performance
70% Global Stocks / 30% Bonds
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Re: Long term Treasuries soaring!
It's down YTD while equities are down.
- TheTimeLord
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Re: Long term Treasuries soaring!
Maybe they are in a Roth, so no taxes.z3r0c00l wrote: ↑Sat Jan 22, 2022 9:01 amSo -12% with inflation, before taxes : (TheTimeLord wrote: ↑Sat Jan 22, 2022 12:00 am According to Morningstar EDV had a return of -6.20% in 2021 and YTD is -3.49%.
https://www.morningstar.com/etfs/arcx/edv/performance
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
Re: Long term Treasuries soaring!
On Monday, if you buy and hold a 30 yr treasury until maturity you'll get roughly 2% per year.CletusCaddy wrote: ↑Fri Jan 21, 2022 6:24 pm Surprised this topic doesn’t exist yet.
EDV up 1.6% today. Doing its job of stock crash insurance.
Then you'll get your money back.
But if you buy a 30 Year TIPS treasury, you'll get your money back plus inflation.
You already knew all that.
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Re: Long term Treasuries soaring!
Aren't TIPS all negative yielding at the moment? So I wouldn't get my money back.hudson wrote: ↑Sat Jan 22, 2022 11:29 amOn Monday, if you buy and hold a 30 yr treasury until maturity you'll get roughly 2% per year.CletusCaddy wrote: ↑Fri Jan 21, 2022 6:24 pm Surprised this topic doesn’t exist yet.
EDV up 1.6% today. Doing its job of stock crash insurance.
Then you'll get your money back.
But if you buy a 30 Year TIPS treasury, you'll get your money back plus inflation.
You already knew all that.
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- Joined: Sat Nov 09, 2019 9:09 am
Re: Long term Treasuries soaring!
Something is always soaring.
Re: Long term Treasuries soaring!
Negative? I'm not an expert, and I've never bought one but here's an example: CUSIP # 912810RL4CletusCaddy wrote: ↑Sat Jan 22, 2022 11:51 amAren't TIPS all negative yielding at the moment? So I wouldn't get my money back.hudson wrote: ↑Sat Jan 22, 2022 11:29 amOn Monday, if you buy and hold a 30 yr treasury until maturity you'll get roughly 2% per year.CletusCaddy wrote: ↑Fri Jan 21, 2022 6:24 pm Surprised this topic doesn’t exist yet.
EDV up 1.6% today. Doing its job of stock crash insurance.
Then you'll get your money back.
But if you buy a 30 Year TIPS treasury, you'll get your money back plus inflation.
You already knew all that.
A $1000 TIPS maturing in 2045: The asking price is $1,198.67
Money back? It depends on inflation
Bottom Line: TIPS "insurance" is expensive, but it could work out.
Re: Long term Treasuries soaring!
Vanguard
YTD through Friday Jan 21
VTI: https://investor.vanguard.com/etf/profi ... rmance/vti -> -8.5%
EDV: https://investor.vanguard.com/etf/profi ... rmance/edv -> -3.6%
It's soaring alright.
The real consolation is that 3-yr return on VTI is 25.x%, and on EDV is 11.x%.
Those returns are out-of-this-world.
So, it may not be unexpected that both lose money in the medium term.
YTD through Friday Jan 21
VTI: https://investor.vanguard.com/etf/profi ... rmance/vti -> -8.5%
EDV: https://investor.vanguard.com/etf/profi ... rmance/edv -> -3.6%
It's soaring alright.
The real consolation is that 3-yr return on VTI is 25.x%, and on EDV is 11.x%.
Those returns are out-of-this-world.
So, it may not be unexpected that both lose money in the medium term.
I don't carry a signature because people are easily offended.
Re: Long term Treasuries soaring!
TIPS coupons have two components:hudson wrote: ↑Sat Jan 22, 2022 12:42 pmNegative? I'm not an expert, and I've never bought one but here's an example: CUSIP # 912810RL4CletusCaddy wrote: ↑Sat Jan 22, 2022 11:51 amAren't TIPS all negative yielding at the moment? So I wouldn't get my money back.hudson wrote: ↑Sat Jan 22, 2022 11:29 amOn Monday, if you buy and hold a 30 yr treasury until maturity you'll get roughly 2% per year.CletusCaddy wrote: ↑Fri Jan 21, 2022 6:24 pm Surprised this topic doesn’t exist yet.
EDV up 1.6% today. Doing its job of stock crash insurance.
Then you'll get your money back.
But if you buy a 30 Year TIPS treasury, you'll get your money back plus inflation.
You already knew all that.
A $1000 TIPS maturing in 2045: The asking price is $1,198.67
Money back? It depends on inflation
Bottom Line: TIPS "insurance" is expensive, but it could work out.
- the fixed coupon rate,
- the inflation component.
The inflation component is essentially floating: you find that out after each period.
Generic treasury yield curve page. In the drop-down there are 6 choices.
https://www.treasury.gov/resource-cente ... data=yield
The first choice shows the regular treasury yield curve:
Date 1Mo 2Mo 3Mo 6Mo 1Yr 2Yr 3Yr 5Yr 7Yr 10Y 20Y 30Y
01/03/22 0.05 0.06 0.08 0.22 0.40 0.78 1.04 1.37 1.55 1.63 2.05 2.01
01/04/22 0.06 0.05 0.08 0.22 0.38 0.77 1.02 1.37 1.57 1.66 2.10 2.07
01/05/22 0.05 0.06 0.09 0.22 0.41 0.83 1.10 1.43 1.62 1.71 2.12 2.09
01/06/22 0.04 0.05 0.10 0.23 0.45 0.88 1.15 1.47 1.66 1.73 2.12 2.09
01/07/22 0.05 0.05 0.10 0.24 0.43 0.87 1.17 1.50 1.69 1.76 2.15 2.11
01/10/22 0.05 0.06 0.13 0.28 0.46 0.92 1.21 1.53 1.71 1.78 2.15 2.11
01/11/22 0.04 0.05 0.11 0.28 0.46 0.90 1.22 1.51 1.69 1.75 2.13 2.08
01/12/22 0.04 0.06 0.12 0.27 0.48 0.92 1.21 1.50 1.67 1.74 2.13 2.08
01/13/22 0.05 0.05 0.12 0.28 0.47 0.91 1.18 1.47 1.64 1.70 2.10 2.05
01/14/22 0.05 0.05 0.13 0.30 0.51 0.99 1.26 1.55 1.72 1.78 2.18 2.12
01/18/22 0.05 0.06 0.16 0.37 0.58 1.06 1.35 1.65 1.82 1.87 2.24 2.18
01/19/22 0.05 0.06 0.17 0.36 0.57 1.04 1.33 1.62 1.78 1.83 2.20 2.14
01/20/22 0.05 0.09 0.17 0.36 0.60 1.08 1.34 1.62 1.77 1.83 2.19 2.14
01/21/22 0.05 0.08 0.17 0.35 0.58 1.01 1.28 1.54 1.70 1.75 2.13 2.07
The fifth choice shows the real treasury yield curve:
DATE 5 YR 7 YR 10 YR 20 YR 30 YR
01/03/22 -1.58 -1.25 -0.97 -0.55 -0.36
01/04/22 -1.56 -1.20 -0.91 -0.47 -0.27
01/05/22 -1.44 -1.10 -0.82 -0.39 -0.20
01/06/22 -1.30 -0.99 -0.73 -0.33 -0.15
01/07/22 -1.28 -0.97 -0.72 -0.33 -0.16
01/10/22 -1.24 -0.95 -0.70 -0.33 -0.15
01/11/22 -1.36 -1.05 -0.79 -0.40 -0.22
01/12/22 -1.32 -1.01 -0.74 -0.35 -0.17
01/13/22 -1.30 -0.99 -0.73 -0.34 -0.17
01/14/22 -1.24 -0.92 -0.66 -0.27 -0.10
01/18/22 -1.15 -0.84 -0.59 -0.22 -0.06
01/19/22 -1.11 -0.81 -0.57 -0.21 -0.05
01/20/22 -1.12 -0.76 -0.50 -0.17 -0.05
01/21/22 -1.16 -0.84 -0.59 -0.26 -0.12
Negative yields roughly mean that in order to get paid the floating inflation rate, one is taking a cut on the fixed coupon.
You can also compute the "break-even inflation rate", which would be markets expectation of inflation.
For example, let's take the 5-year horizon, as of trade date Jan 21 2022.
Regular 5-year yield: 1.54%
Real 5-year yield: -1.16%
Inflation expectations over 5-years: 1.54% - (-1.16%) = 2.7%
If you expect that inflation over next 5 years is going to be HIGHER, then:
- buy 5-year TIP,
- sell 5-year Treasury.
If you expect the opposite, i.e., that next 5 year average inflation is going to be LOWER, then do the opposite.
Market thinks that next 5-year inflation is 2.7%.
I don't carry a signature because people are easily offended.
Re: Long term Treasuries soaring!
Maybe time for a “Commodities are soaring” thread?
Re: Long term Treasuries soaring!
Crypto losses are soaring.
I don't carry a signature because people are easily offended.
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Re: Long term Treasuries soaring!
that hasn't been true in the past. go to portfoliovisualizer.com and plug in TIPS vs intermediate treasuries. the returns are essentially the same over time. so if their is an insurance premium for TIPS it has been a negative premiumhudson wrote: ↑Sat Jan 22, 2022 12:42 pmNegative? I'm not an expert, and I've never bought one but here's an example: CUSIP # 912810RL4CletusCaddy wrote: ↑Sat Jan 22, 2022 11:51 amAren't TIPS all negative yielding at the moment? So I wouldn't get my money back.hudson wrote: ↑Sat Jan 22, 2022 11:29 amOn Monday, if you buy and hold a 30 yr treasury until maturity you'll get roughly 2% per year.CletusCaddy wrote: ↑Fri Jan 21, 2022 6:24 pm Surprised this topic doesn’t exist yet.
EDV up 1.6% today. Doing its job of stock crash insurance.
Then you'll get your money back.
But if you buy a 30 Year TIPS treasury, you'll get your money back plus inflation.
You already knew all that.
A $1000 TIPS maturing in 2045: The asking price is $1,198.67
Money back? It depends on inflation
Bottom Line: TIPS "insurance" is expensive, but it could work out.
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- Posts: 500
- Joined: Tue May 19, 2015 9:55 pm
- Location: Austin, TX
Re: Long term Treasuries soaring!
that hasn't been true in the past. go to portfoliovisualizer.com and plug in TIPS vs intermediate treasuries. the returns are essentially the same over time. so if their is an insurance premium for TIPS it has been a negative premiumhudson wrote: ↑Sat Jan 22, 2022 12:42 pmNegative? I'm not an expert, and I've never bought one but here's an example: CUSIP # 912810RL4CletusCaddy wrote: ↑Sat Jan 22, 2022 11:51 amAren't TIPS all negative yielding at the moment? So I wouldn't get my money back.hudson wrote: ↑Sat Jan 22, 2022 11:29 amOn Monday, if you buy and hold a 30 yr treasury until maturity you'll get roughly 2% per year.CletusCaddy wrote: ↑Fri Jan 21, 2022 6:24 pm Surprised this topic doesn’t exist yet.
EDV up 1.6% today. Doing its job of stock crash insurance.
Then you'll get your money back.
But if you buy a 30 Year TIPS treasury, you'll get your money back plus inflation.
You already knew all that.
A $1000 TIPS maturing in 2045: The asking price is $1,198.67
Money back? It depends on inflation
Bottom Line: TIPS "insurance" is expensive, but it could work out.
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- Posts: 500
- Joined: Tue May 19, 2015 9:55 pm
- Location: Austin, TX
Re: Long term Treasuries soaring!
Thanks Alphaless!AlphaLess wrote: ↑Sat Jan 22, 2022 1:19 pmTIPS coupons have two components:hudson wrote: ↑Sat Jan 22, 2022 12:42 pmNegative? I'm not an expert, and I've never bought one but here's an example: CUSIP # 912810RL4CletusCaddy wrote: ↑Sat Jan 22, 2022 11:51 amAren't TIPS all negative yielding at the moment? So I wouldn't get my money back.hudson wrote: ↑Sat Jan 22, 2022 11:29 amOn Monday, if you buy and hold a 30 yr treasury until maturity you'll get roughly 2% per year.CletusCaddy wrote: ↑Fri Jan 21, 2022 6:24 pm Surprised this topic doesn’t exist yet.
EDV up 1.6% today. Doing its job of stock crash insurance.
Then you'll get your money back.
But if you buy a 30 Year TIPS treasury, you'll get your money back plus inflation.
You already knew all that.
A $1000 TIPS maturing in 2045: The asking price is $1,198.67
Money back? It depends on inflation
Bottom Line: TIPS "insurance" is expensive, but it could work out.
- the fixed coupon rate,
- the inflation component.
The inflation component is essentially floating: you find that out after each period.
Generic treasury yield curve page. In the drop-down there are 6 choices.
https://www.treasury.gov/resource-cente ... data=yield
The first choice shows the regular treasury yield curve:
Date 1Mo 2Mo 3Mo 6Mo 1Yr 2Yr 3Yr 5Yr 7Yr 10Y 20Y 30Y
01/03/22 0.05 0.06 0.08 0.22 0.40 0.78 1.04 1.37 1.55 1.63 2.05 2.01
01/04/22 0.06 0.05 0.08 0.22 0.38 0.77 1.02 1.37 1.57 1.66 2.10 2.07
01/05/22 0.05 0.06 0.09 0.22 0.41 0.83 1.10 1.43 1.62 1.71 2.12 2.09
01/06/22 0.04 0.05 0.10 0.23 0.45 0.88 1.15 1.47 1.66 1.73 2.12 2.09
01/07/22 0.05 0.05 0.10 0.24 0.43 0.87 1.17 1.50 1.69 1.76 2.15 2.11
01/10/22 0.05 0.06 0.13 0.28 0.46 0.92 1.21 1.53 1.71 1.78 2.15 2.11
01/11/22 0.04 0.05 0.11 0.28 0.46 0.90 1.22 1.51 1.69 1.75 2.13 2.08
01/12/22 0.04 0.06 0.12 0.27 0.48 0.92 1.21 1.50 1.67 1.74 2.13 2.08
01/13/22 0.05 0.05 0.12 0.28 0.47 0.91 1.18 1.47 1.64 1.70 2.10 2.05
01/14/22 0.05 0.05 0.13 0.30 0.51 0.99 1.26 1.55 1.72 1.78 2.18 2.12
01/18/22 0.05 0.06 0.16 0.37 0.58 1.06 1.35 1.65 1.82 1.87 2.24 2.18
01/19/22 0.05 0.06 0.17 0.36 0.57 1.04 1.33 1.62 1.78 1.83 2.20 2.14
01/20/22 0.05 0.09 0.17 0.36 0.60 1.08 1.34 1.62 1.77 1.83 2.19 2.14
01/21/22 0.05 0.08 0.17 0.35 0.58 1.01 1.28 1.54 1.70 1.75 2.13 2.07
The fifth choice shows the real treasury yield curve:
DATE 5 YR 7 YR 10 YR 20 YR 30 YR
01/03/22 -1.58 -1.25 -0.97 -0.55 -0.36
01/04/22 -1.56 -1.20 -0.91 -0.47 -0.27
01/05/22 -1.44 -1.10 -0.82 -0.39 -0.20
01/06/22 -1.30 -0.99 -0.73 -0.33 -0.15
01/07/22 -1.28 -0.97 -0.72 -0.33 -0.16
01/10/22 -1.24 -0.95 -0.70 -0.33 -0.15
01/11/22 -1.36 -1.05 -0.79 -0.40 -0.22
01/12/22 -1.32 -1.01 -0.74 -0.35 -0.17
01/13/22 -1.30 -0.99 -0.73 -0.34 -0.17
01/14/22 -1.24 -0.92 -0.66 -0.27 -0.10
01/18/22 -1.15 -0.84 -0.59 -0.22 -0.06
01/19/22 -1.11 -0.81 -0.57 -0.21 -0.05
01/20/22 -1.12 -0.76 -0.50 -0.17 -0.05
01/21/22 -1.16 -0.84 -0.59 -0.26 -0.12
Negative yields roughly mean that in order to get paid the floating inflation rate, one is taking a cut on the fixed coupon.
You can also compute the "break-even inflation rate", which would be markets expectation of inflation.
For example, let's take the 5-year horizon, as of trade date Jan 21 2022.
Regular 5-year yield: 1.54%
Real 5-year yield: -1.16%
Inflation expectations over 5-years: 1.54% - (-1.16%) = 2.7%
If you expect that inflation over next 5 years is going to be HIGHER, then:
- buy 5-year TIP,
- sell 5-year Treasury.
If you expect the opposite, i.e., that next 5 year average inflation is going to be LOWER, then do the opposite.
Market thinks that next 5-year inflation is 2.7%.
Tell me more about the real treasury yield curve. How do they get it. What does it mean?
Re: Long term Treasuries soaring!
Treasury "real" yield curve is implied from TIPs prices (and corresponding coupons).hudson wrote: ↑Sat Jan 22, 2022 3:23 pmThanks Alphaless!AlphaLess wrote: ↑Sat Jan 22, 2022 1:19 pmTIPS coupons have two components:hudson wrote: ↑Sat Jan 22, 2022 12:42 pmNegative? I'm not an expert, and I've never bought one but here's an example: CUSIP # 912810RL4CletusCaddy wrote: ↑Sat Jan 22, 2022 11:51 amAren't TIPS all negative yielding at the moment? So I wouldn't get my money back.
A $1000 TIPS maturing in 2045: The asking price is $1,198.67
Money back? It depends on inflation
Bottom Line: TIPS "insurance" is expensive, but it could work out.
- the fixed coupon rate,
- the inflation component.
The inflation component is essentially floating: you find that out after each period.
Generic treasury yield curve page. In the drop-down there are 6 choices.
https://www.treasury.gov/resource-cente ... data=yield
The first choice shows the regular treasury yield curve:
Date 1Mo 2Mo 3Mo 6Mo 1Yr 2Yr 3Yr 5Yr 7Yr 10Y 20Y 30Y
01/03/22 0.05 0.06 0.08 0.22 0.40 0.78 1.04 1.37 1.55 1.63 2.05 2.01
01/04/22 0.06 0.05 0.08 0.22 0.38 0.77 1.02 1.37 1.57 1.66 2.10 2.07
01/05/22 0.05 0.06 0.09 0.22 0.41 0.83 1.10 1.43 1.62 1.71 2.12 2.09
01/06/22 0.04 0.05 0.10 0.23 0.45 0.88 1.15 1.47 1.66 1.73 2.12 2.09
01/07/22 0.05 0.05 0.10 0.24 0.43 0.87 1.17 1.50 1.69 1.76 2.15 2.11
01/10/22 0.05 0.06 0.13 0.28 0.46 0.92 1.21 1.53 1.71 1.78 2.15 2.11
01/11/22 0.04 0.05 0.11 0.28 0.46 0.90 1.22 1.51 1.69 1.75 2.13 2.08
01/12/22 0.04 0.06 0.12 0.27 0.48 0.92 1.21 1.50 1.67 1.74 2.13 2.08
01/13/22 0.05 0.05 0.12 0.28 0.47 0.91 1.18 1.47 1.64 1.70 2.10 2.05
01/14/22 0.05 0.05 0.13 0.30 0.51 0.99 1.26 1.55 1.72 1.78 2.18 2.12
01/18/22 0.05 0.06 0.16 0.37 0.58 1.06 1.35 1.65 1.82 1.87 2.24 2.18
01/19/22 0.05 0.06 0.17 0.36 0.57 1.04 1.33 1.62 1.78 1.83 2.20 2.14
01/20/22 0.05 0.09 0.17 0.36 0.60 1.08 1.34 1.62 1.77 1.83 2.19 2.14
01/21/22 0.05 0.08 0.17 0.35 0.58 1.01 1.28 1.54 1.70 1.75 2.13 2.07
The fifth choice shows the real treasury yield curve:
DATE 5 YR 7 YR 10 YR 20 YR 30 YR
01/03/22 -1.58 -1.25 -0.97 -0.55 -0.36
01/04/22 -1.56 -1.20 -0.91 -0.47 -0.27
01/05/22 -1.44 -1.10 -0.82 -0.39 -0.20
01/06/22 -1.30 -0.99 -0.73 -0.33 -0.15
01/07/22 -1.28 -0.97 -0.72 -0.33 -0.16
01/10/22 -1.24 -0.95 -0.70 -0.33 -0.15
01/11/22 -1.36 -1.05 -0.79 -0.40 -0.22
01/12/22 -1.32 -1.01 -0.74 -0.35 -0.17
01/13/22 -1.30 -0.99 -0.73 -0.34 -0.17
01/14/22 -1.24 -0.92 -0.66 -0.27 -0.10
01/18/22 -1.15 -0.84 -0.59 -0.22 -0.06
01/19/22 -1.11 -0.81 -0.57 -0.21 -0.05
01/20/22 -1.12 -0.76 -0.50 -0.17 -0.05
01/21/22 -1.16 -0.84 -0.59 -0.26 -0.12
Negative yields roughly mean that in order to get paid the floating inflation rate, one is taking a cut on the fixed coupon.
You can also compute the "break-even inflation rate", which would be markets expectation of inflation.
For example, let's take the 5-year horizon, as of trade date Jan 21 2022.
Regular 5-year yield: 1.54%
Real 5-year yield: -1.16%
Inflation expectations over 5-years: 1.54% - (-1.16%) = 2.7%
If you expect that inflation over next 5 years is going to be HIGHER, then:
- buy 5-year TIP,
- sell 5-year Treasury.
If you expect the opposite, i.e., that next 5 year average inflation is going to be LOWER, then do the opposite.
Market thinks that next 5-year inflation is 2.7%.
Tell me more about the real treasury yield curve. How do they get it. What does it mean?
The math is roughly the same as in the case of the regular treasury.
What does it mean?
Well, let's take the 5-year point on the "real" treasury curve from Jan 21 2022. Based on that website, which I copied from, that yield is -1.16%.
What does this mean? Let's buy that bond, and hold it for 5 years, and look through hypothetical scenarios.
In each hypothetical scenario, the inflation is different. In each of those cases, you get inflation - 1.16% yield on that bond.
For example, if inflation averages 3.5% over the next 5 years, then the 5-year TIP will yield you 3.5% - 1.16%, or 2.34%.
Or, if inflation averages 10.5% over the next 5 years, then the 5-year TIP will yield you 10.5 - 1.16%, or 9.34%.
Etc
When used with the regular (non-TIP) 5-year bond, you can also infer the market-implied inflation EXPECTATION.
So, the 5-year regular bond yields 1.54%. So, inflation expectation is 1.54% - -1.16% = 2.7%.
If the average inflation over the next 5 years ends up being EXACTLY 2.7%, then both bonds will end up yielding exactly the same.
If the average inflation over the next 5 years ends up being higher than 2.7%, then TIP would perform better.
And if the average inflation over the next 5 years end ups being lower than 2.7%, then the regular bond will perform better.
I don't carry a signature because people are easily offended.