The U.S. sale of $9 billion in 30-year Treasury Inflation Protected Securities (TIPS) drew the weakest demand in a dozen years amid stagnant inflation and as the Federal Reserve reduces its bond purchases.
The bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, was 2.34, the lowest level since a sale in October 2001, the last offering before the U.S. suspended sales of the security for almost a decade. Auctions resumed in February 2010. The 30-year TIPS sold yesterday yielded 1.495 percent, the most since June 2011. The average forecast of seven of the Fed’s 22 primary dealers in a Bloomberg News poll was a yield of 1.463 percent.