TIPS spreads trade quite well today and spreads are nearly back to levels which prevailed just prior to the FOMC announcement on Wednesday.
Five year breakevens are at 156.5 versus 157 prior to FOMC. Ten year spreads are at 194.5 versus 195. Thirty year spreads are at 210 versus 211 before the FOMC spoke.
Today is month end and one market maker noted a chunk index extension which is supporting the asset class today. He said that since the sell off in breaks following the FOMC buyers have emerged and he would be leery of selling later today on the view that this is purely a calendar based move. he thinks that the move might have legs which will extend into November.