Predicted I-bond rates?

[poocher]

I have scoured and googled all the usual sources for predictions about both parts of the I-bond rates that are expected for the May 1-Nov 1 period, but found nothing at all. Has anyone read any predictions?

 

[wabmester]

It shouldn't be too hard to predict. The monthly CPI numbers are available, so you just need to calculate the trailing 6-month inflation (currently about 1.2%, annualizes to 2.4%).

My guess is that the fixed rate is based on the trailing 6-month average of the 5-year TIPS, which would put it below 1%. In other words, I would buy the current issue rather than waiting for the new issue in May.

 

[wabmester]

Ahem. I just checked the new i-bond rates. In case anyone doubted my predictive powers...

It shouldn't be too hard to predict.   The monthly CPI numbers are available, so you just need to calculate the trailing 6-month inflation (currently about 1.2%, annualizes to 2.4%).

The CPI increase turned out to be 1.19% (annualized to 2.38%).

My guess is that the fixed rate is based on the trailing 6-month average of the 5-year TIPS, which would put it below 1%.   In other words, I would buy the current issue rather than waiting for the new issue in May.

They dropped the fixed rate to 1%.

http://www.publicdebt.treas.gov/com/comi0504.htm

 

[cute fuzzy bunny]

Looks like you guys are both right.

Now get along or we'll make ya talk about mortgages.

 

[wabmester]

Oh, I wasn't disagreeing with anybody. I was just clearing my throat so everybody would look over here and witness my Amazing Powers of Prediction (TM).

FWIW, I wouldn't buy i-bonds at these rates either. Maybe in November after both real rates and inflation have gone through the roof (and remember, you heard it here first!).

 

[cute fuzzy bunny]

If you made me take two mortgages, I'm afraid I'd be calling you something rather unpleasant

 

[cute fuzzy bunny]

That's OK -- I won't be home--call me anything you like.

It sure as hell isnt going to be "shirley"...