wanaberetiree
Full time employment: Posting here.
- Joined
- Apr 20, 2010
- Messages
- 718
Wow, really?
Just FYI.
Just FYI.
Thanks. The following link indicates that TIPS do lose value in deflation. It sounds as if it may be an academic difference though, since TIPS owners are paid in full, if they hold until maturity.According to Treasury Direct, the composite yield on I-bonds cannot go negative, indeed. See the example here:
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm
Fixed rate = 0%, inflation rate = -0.8%, composite rate set at 0%
What happens to TIPS if deflation occurs?
The principal is adjusted downward, and your interest payments are less than they would be if inflation occurred or if the Consumer Price Index remained the same. You have this safeguard: at maturity, if the adjusted principal is less than the security's original principal, you are paid the original principal.
you know I did not buy enough Ibonds in 2000 or 2001.. they are still making 4.91%...
haven't bought for years.... it is a scary place.... I did not know ibonds went negative. The thing with negative rates... the mattress may make sense... look at CDs... not much, but better than -
I agree. I think this is a 6 month event.I imagine the next cycle will be back in the new normal 1-2% range. This past 6 month cycle caught the big oil collapse. CPI index bottomed out at 233.7 in January and is back to 236.1 for March. Yes, Im tracking closely if it doesn't make it back to last Julys 238.25 number by June; I lose next years 2% COLA. Come on oil...keep climbing back!
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Actuals on some older IBonds
I hope you loaded up on those IBonds!!!Actuals on some older IBonds
What did you use to display this data?
CPI-U change for October was -0.045%, you need to look for "Not Seasonally adjusted" number.CPI was up 0.2% for last month, so this next six months may show some inflation since gasoline prices have stopped going down.
Did I miss the notice here that IBond rates went back up to 1.64%, with 0.1% fixed rate and 0.77% inflation rate? This didn't show up in a search on IBonds.
The poster titled it "I Bonds"
http://www.early-retirement.org/forums/f28/i-bonds-new-rates-79315.html