Personal Finance Advice and Commentary

Tuesday, March 08, 2016 10:37 am
By Dr. Don Taylor ·

Treasury Inflation Protected Securities (TIPS) are finding a bid in the marketplace after being ignored during a period of low inflation.

Friday, December 27, 2013 6:05 am
By Dr. Don Taylor ·

Comparing the new U.S. Treasury floating-rate note versus variable-rate and step-up CDs.

Friday, March 23, 2012 2:30 pm
By Sheyna Steiner ·

Yesterday, the Financial Times website,, reported that $13 billion of 10-year Treasury inflation-protected securities were sold at a negative yield of -0.089 percent at this week’s Treasury auction.

The interest rate on these particular TIPS was 0.125 percent; investors paid a premium of $102.23 for every $100 worth of bonds. Paying the extra $2.23 pushed the yield down to -0.089 percent.

Why would otherwise rational people pay for bonds that are, on the surface, guaranteed to lose money? In a word: inflation. TIPS pay more as inflation rises, thanks to the Consumer Price Index-linked component that adjusts the principal twice per year.