Tuesday afternoon, the Treasury Department completed its sale of the ten-year inflation protected note, known as TIPS.

The auction of $6.0 billion worth of 10-year TIPS notes posted an interest rate of 2.125 percent, while drawing a high-yield of 1.589 percent. The demand for the notes was modest, with the bid-to-cover ratio coming in at 2.25.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The previous auction for comparable securities took place in January, when $8.0 billion worth of the securities was sold. The auction drew a yield of 2.245 percent, while attracting strong demand with the bid-to-cover ratio coming in at 2.48.

The ten-year TIPS auction is closely watched, as the spread between the security and the regular ten-year note will give an indication of near-term inflation.

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