Today’s auction of $13 billion in US 10-year Treasury Inflation-Protected Securities (TIPS) went off at a yield of -0.89%, just the second time that yields have turned negative. Demand for the securities came in at 2.81x the total value of the offer.
Buyers are willing to accept a negative interest rate on TIPS because the securities also pay the rate of inflation. 10-year Treasury note yields are also down today as the weak manufacturing reports out of Europe and China made US debt more desirable.
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