The US Department of Treasury announced after their November quarterly refunding meeting they will discontinue issuing 20-year TIPS and start issuing 30-year TIPS.

"To potentially improve liquidity in the TIPS program, extend the average maturity of the portfolio, and better capture the premium associated with inflation protection, Treasury will replace its 20-year TIPS offering with 30-year TIPS."

Treasury issued 30-year TIPS from 1998 to 2001. Then they stopped issuing the 30-year and only issued 10-year TIPS. In 2004, Treasury started issuing 5-year and 20-year TIPS. Now the 20-year TIPS are discontinued.

There is already a gap in terms of available TIPS maturities between 2019 and 2025. This gap will be filled over the next five years as new 10-year TIPS are issued. With the re-introduction of the 30-year TIPS, there will be another gap between 2032 and 2040. This second gap will be very hard to fill unless Treasury changes course and starts issuing 20-year TIPS again.

The first new 30-year TIPS will be issued in February 2010. That's another change in the auction schedule. In the past, TIPS were issued only in January, April, July and October. Treasury hinted they will increase the frequency of issuing TIPS, but they are not ready to announce the details yet.

"Given Treasury’s commitment to this program, and our plan to gradually increase TIPS issuance, we are considering making further changes to the TIPS auction calendar. Any changes will be made in close consultation with market participants and will be done in a transparent manner, consistent with our operating framework of being regular and predictable."

It remains to been seen how much a term premium the market will assign to 30-year TIPS. Right now the difference in yield between 10-year and 20-year TIPS is about 0.6%.

Of course all the existing issues will remain in circulation until they mature. If there is perceived scarcity, the current 2025-2032 TIPS may see a bump in their prices.