April 2024 – Treasury Inflation-Protected Securities (2024)

FAQs

What is the Treasury rate for 2024? ›

10 Year Treasury Inflation-Indexed Security Rate is at 1.63%, compared to 1.61% the previous market day and 1.90% last year. This is higher than the long term average of 0.91%.

Basic Info. 5 Year TIPS/Treasury Breakeven Rate is at 1.86%, compared to 1.88% the previous market day and 2.26% last year. This is lower than the long term average of 1.93%.

The principal value of TIPS rises as inflation rises, while the interest payment varies with the adjusted principal value of the bond. The principal amount is protected since investors will never receive less than the originally invested principal.

TREASURY BILL RATES

The T-Bill rate is the average of the bond equivalent rates of the 13-week T-Bills as published by the U.S. Department of the Treasury. For the quarter ending June 30, 2024, the average of the T-Bill rates is 5.39%.

WASHINGTON — The U.S. Department of the Treasury is offering $125 billion of Treasury securities to refund approximately $111 billion of privately-held Treasury notes maturing on August 15, 2024. This issuance will raise new cash from private investors of approximately $14 billion.

The best time to buy TIPS, he says, is when an investor expects inflation to increase, as this would increase the principal and interest payments over that period. "Since interest rates are high and the Fed is currently intent on lowering inflation, it's probably not the best time to invest in TIPS," he says.

Earnings from TIPS are exempt from state and local income taxes, as are other U.S. Treasury securities. TIPS owners pay federal income tax on interest payments the same year they receive those payments, and on growth in principal in the year it occurs.

• Fannie Mae: Rates Will Decline to 6.4%

The August Housing Forecast from Fannie Mae puts the average 30-year fixed rate at 6.4% by year-end, a slight decline from 6.6% in the third quarter. All told, the mortgage giant predicts mortgage rates will average 6.7% in 2024 and 6% in 2025.

We sell Treasury Notes for a term of 2, 3, 5, 7, or 10 years. Notes pay a fixed rate of interest every six months until they mature. You can hold a note until it matures or sell it before it matures.

What happens to tips when interest rates go up? ›

TIPS involve interest rate risk: Just like any other type of bond, buying TIPS introduces interest rate risk to a portfolio. If rates rise and inflation expectations are steady (or also rise, but not as much as yields), real yields also rise, potentially leading to negative returns in TIPS.

TIPS are more attractive if the real yield is higher than the fixed rate component on I Bonds. As of November 2024, TIPS are more attractive than I bonds because the real yield on TIPS for maturities between 5 and 17 years is 2.3% or higher. In comparison, the fixed rate component of I Bonds is only 1.3%.

The new interest rate for these bonds, effective as the bonds enter semiannual interest periods from May 2024 through October 2024 is 3.81%.

These high-duration funds are packed with inflation protected bonds with lengthy periods of maturity, sometimes upwards of 25-30 years. High-duration funds are at risk of volatile periods for interest rates and inflation. When interest rates are hiked, it could lead to a sizeable drop in the bond fund's overall value.

For I bonds issued between May 1, 2024 and Oct. 31, 2024, the fixed interest rate is 1.3%.

Basic Info

6 Month Treasury Bill Rate is at 4.48%, compared to 4.54% the previous market day and 5.29% last year.