In the US, Treasury bonds maturing in 2029 offered a 4.7% yield — MarketWatch
In the United States, zero-coupon Treasury bonds maturing on February 15, 2029, offered an annual yield of 4.7% at the time of publication, MarketWatch reports. These are securities with the CUSIP identifier 912833XN5.
Payment on the maturity date
Zero-coupon Treasury bonds do not provide regular interest payments. The investor receives the principal amount and accrued income on the maturity date. The columnist noted that investing $1,000 in these securities could yield approximately $1,118 by the time of maturity.
In the author’s view, the probability of a US government default over the next three years is extremely low. He links the elevated yield of three-year bonds to investor concerns about the budget, inflation and other factors. The author also recalls that as a bond’s price declines, its yield rises.
More current news is available on the UA.News Telegram channel Telegram.
Inflation-protected bonds
The author also drew attention to US Treasury Inflation-Protected Securities, or TIPS. According to his data, TIPS maturing in April 2029 with a 3.875% coupon at that time provided an annual yield of 2.3% above inflation.
If inflation, which at that time exceeded 3% per year, had remained at that level, the total yield on these securities could have been approximately 5.3% annually, the author believes. He also noted that TIPS maturing within the next ten years offered up to 2.5% above inflation, while long-term securities offered up to 3.1%. At the same time, bond prices may fluctuate before maturity, and conclusions regarding their attractiveness are the columnist’s own assessment.
