US 5-year TIPS sell at 0.305% at auction

Results from the $16 billion re-opening of a 4-year, 8-month TIPS sale.

The previously issued inflation-index notes were yielding 0.335% in the WI market on the bid side ahead of the sale. That's a 3 basis point stop though, showing massive demand for inflation protection.

Bid-to-cover at 2.58. 5-year TIPS last sold in April with a bid-to-cover of 2.27. Average of the past 10 sales was 2.51.

Nominal 5-year notes are trading at 1.49%, which puts breakevens (or inflation expectations) at 1.525 about 1.18%.

The Fed has been brushing off breakevens by blaming oil but the market is all-knowing and says the Fed is wrong on inflation.