The 10-year TIPS auction closed on April 7, 2009 at 1.589%. With inflation adjustment and accrued interest, each $1,000 bond will cost $1,038.46267. For more details, please read the official auction result announcement. For more information on how TIPS auctions work, please refer to the TIPS Auctions section on this web site.

The next TIPS auction will be for a 5-year TIPS on Thursday April 23, 2009. It will be a new issue with maturity date of April 15, 2014. The official announcement will come out on Monday April 20, 2009. At the time of this writing, the yield on the secondary market for a TIPS maturing in 2014 is about 1.3% real, while the yield for a Treasury bond maturing in March 2014 is about 1.9% nominal.

The State of California sold $6.5 billion of General Obligation (GO) bonds. Due to higher than expected interest from investors, the size of the bond offer was increased from $4 billion to $6.5 billion. Because California has a lower credit rating than other states and the U.S. Treasury, these bonds were sold at higher yields than Treasury bonds of comparable maturity, whereas due to federal income tax exemption, the yield on a municipal bond is typically lower than that on a Treasury bond. The yield on the bonds ranged from 3.2% for bonds due in 2013 to 6.1% for bonds due in 2038. All these yields are exempt from Federal and California state income taxes. They are also exempt from the Alternative Minimum Tax (AMT). For a California resident, the tax equivalent yield can go as high as 10% on the longer term bonds.

The detailed results for the bonds sold in this offer are listed in this document.

The Treasury Department will auction a 10-year TIPS on Tuesday, April 7, 2009. This will be a reopening of a bond sold in January.

The official announcement will come out on Thursday, April 2, 2009.