5-year TIPS auction yield is 2.114%

The high yield was 2.114% in the Treasury's auction of 5-year TIPS, which was held this morning. The actual interest rate that will be paid by the investment is 2%. Consequently, the price for a $1,000 bond was set at $997.30733

The bonds will have interest payment days of April 15 and October 15, so investors also have to prepay interest of $0.82186 per bond to cover the period from April 15 to the bond's issue date, April 30. This prepayment will be reimbursed to investors in the October 15 interest payment.

Thus the total cost to TreasuryDirect investors will be $998.12919 per bond.

TreasuryDirect investors purchased $19,225,000 of the TIPS - a bit less than two-tenths of one percent of the total amount invested. This includes both the online and legacy versions of TreasuryDirect.