gfp Posted December 28, 2021 Share Posted December 28, 2021 (edited) 13 minutes ago, ValueMaven said: @gfpvery helpful. Thanks. Why are you taking March and Sept rates when the rate resets in Nov and May? Why the 2 month lag. also what is the source of that table? I can’t seem to find that specific one on the BLS website BLS website -> Data Tools -> Popular series -> price indexes -> CPI-U https://data.bls.gov/cgi-bin/surveymost?bls As for why I used September's figure, I was just following your lead (like I said I don't follow this stuff closely and am not investing in these bonds) " For example, The Sept numbers for 2021 were posted on Oct 13, 2021 for use on the "first business day in November" " Edited December 28, 2021 by gfp Link to comment Share on other sites More sharing options...
hasilp89 Posted December 28, 2021 Share Posted December 28, 2021 I just started googling for this also. What @gfp is suggesting looks correct and the dates appear to tie at least for the current rate - This website tracks it - https://tipswatch.com/tracking-inflation-and-i-bonds/ Looks like we’re at 2.66% with 4 months to go CPI-I index https://www.bls.gov/news.release/cpi.t01.htm Link to comment Share on other sites More sharing options...
gfp Posted December 28, 2021 Share Posted December 28, 2021 20 minutes ago, hasilp89 said: I just started googling for this also. What @gfp is suggesting looks correct and the dates appear to tie at least for the current rate - This website tracks it - https://tipswatch.com/tracking-inflation-and-i-bonds/ Looks like we’re at 2.66% with 4 months to go CPI-I index https://www.bls.gov/news.release/cpi.t01.htm Yeah - looks right on your link they had a clip from the treasury's announcement where they say explicitly that the November reset uses the CPI-U prints from March -> September. Quote “The composite rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the 30-year life of the bond, and the semiannual inflation rate. The 7.12% composite rate for I bonds bought from November 2021 through April 2022 applies for the first six months after the issue date. The composite rate combines a 0.00% fixed rate of return with the 7.12% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 264.877 in March 2021 to 274.310 in September 2021, a six-month change of 3.56%.” Link to comment Share on other sites More sharing options...
ValueMaven Posted December 29, 2021 Share Posted December 29, 2021 Great site. Thank you for sharing. Guy posts a lot of interesting material and analysis Link to comment Share on other sites More sharing options...
longterminvestor Posted December 29, 2021 Share Posted December 29, 2021 On 12/28/2021 at 8:08 AM, gfp said: I'm not following this super closely, but I think you derive the 7.12% by taking the 6 month change from the data dates you state above and double it to annualize it - 274.31 minus 264.877 is 9.433, which is a 3.56127561% increase over 6 months. Double that and it is 7.12255% AND THAT LADIES AND GENTLEMAN IS WHAT I CALL THE BLINDING FLASH OF THE OBVIOUS!! THE CODE IS CRACKED. Link to comment Share on other sites More sharing options...
longterminvestor Posted December 29, 2021 Share Posted December 29, 2021 (edited) see attached spreadsheet that checks out with formulas to track. IBOND SAVINGS CALCULATION.xlsx Edited December 30, 2021 by longterminvestor deleted personal info from Excel Link to comment Share on other sites More sharing options...
fareastwarriors Posted December 30, 2021 Share Posted December 30, 2021 Haven't touched ibonds in years but yet I'm here for the party. Put in 10k order today. Hope I make the cut off! Link to comment Share on other sites More sharing options...
ValueMaven Posted December 31, 2021 Share Posted December 31, 2021 (edited) Welcome aboard @fareastwarriors - most of us will be double dipping in January as well. Early modeling of the May rest rate looks like 4.5% to 8%. If inflation the next 4 months matches the previous 2 and doesn’t slow down, the variable rate will be ~8%. Right now it’s 2.66% with only 2 out of the 6 months reporting. Edited December 31, 2021 by ValueMaven Link to comment Share on other sites More sharing options...
ValueMaven Posted January 1, 2022 Share Posted January 1, 2022 Just placed my full year allotment for 2022 this morning. Dec 21 interest hits on Monday: 1/3/22 Link to comment Share on other sites More sharing options...
longterminvestor Posted January 3, 2022 Share Posted January 3, 2022 @ValueMaven Will be doing the same. See attached 1970-1985 breakdown showing the rate as calculated using formula now. This period is considered the most inflationary time in history so I wanted to run the simulation. For the rate to stay above 7% in 2022, the March 2022 CPI-U has to post above 284. Which would be a 7.22% increase for 12 months. From 1970 - 1985, the annual change from March to March was above 7% 5 years out of the 15 year period. My Mr. Buffett "And then what" analysis leads me to be optimistic about short terms prospects for this instrument however long term (beyond 3-5yrs) it becomes less interesting. I see it as a good place to stash cash and earn decent, completely safe return. 1970-1985 NUMBERS.pdf Link to comment Share on other sites More sharing options...
ValueMaven Posted January 8, 2022 Share Posted January 8, 2022 CPI comes out on Wednesday. The first two months are already running at 2.66% annualized. The May rate might be 6-7% again Link to comment Share on other sites More sharing options...
ValueMaven Posted January 12, 2022 Share Posted January 12, 2022 I Bonds! CPI for December was up 7.1% year over year… and 0.3% month over month. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted January 12, 2022 Share Posted January 12, 2022 On 1/8/2022 at 1:49 PM, ValueMaven said: CPI comes out on Wednesday. The first two months are already running at 2.66% annualized. The May rate might be 6-7% again 7% again Went to a presentation by Bullard in recent weeks where he acknowledged that the Fed may have to be a little more proactive/overreacting to get inflation under control. He expects it to average like 4ish% this year so we'll see. Link to comment Share on other sites More sharing options...
Spekulatius Posted January 12, 2022 Author Share Posted January 12, 2022 3 minutes ago, TwoCitiesCapital said: 7% again Went to a presentation by Bullard in recent weeks where he acknowledged that the Fed may have to be a little more proactive/overreacting to get inflation under control. He expects it to average like 4ish% this year so we'll see. I think I am going to put another chunk on by the end of this month. Link to comment Share on other sites More sharing options...
ValueMaven Posted February 11, 2022 Share Posted February 11, 2022 May-22 reset rate is looking to be well north of 5%. Right now you are at 4.98% with TWO months left. Looks to be in the 6%+ range or higher. Link to comment Share on other sites More sharing options...
hasilp89 Posted February 11, 2022 Share Posted February 11, 2022 reloaded for 2022 on the last day of jan. Link to comment Share on other sites More sharing options...
Spekulatius Posted March 9, 2022 Author Share Posted March 9, 2022 (edited) If we do get 8-9%, I think the "returns" this year will beat stocks. I have put a bit more in late January, but we haven't filled out family allocation for 2022 yet. https://www.bloomberg.com/news/articles/2022-03-09/u-s-inflation-data-to-capture-prewar-prices-rather-than-peak Edited March 9, 2022 by Spekulatius Link to comment Share on other sites More sharing options...
ValueMaven Posted March 9, 2022 Share Posted March 9, 2022 You are at 5% already with 2 more reports left. Gas prices are up huge m/m so that is going to add to the next inflation print for sure ...Figure 6-7% at a minimum ... https://tipswatch.com/tracking-inflation-and-i-bonds/ Link to comment Share on other sites More sharing options...
ValueMaven Posted March 10, 2022 Share Posted March 10, 2022 https://tipswatch.com/2022/03/10/u-s-inflation-soared-0-8-in-february-hitting-annual-rate-of-7-9-highest-in-41-years/ For I Bonds. The February report is the fifth of a six-month string that will determine the I Bond’s new inflation-adjusted variable rate, which will be reset on May 1 for all I Bonds. So far, inflation from September 2021 to February 2022 has been running at 3.43%, which translates to a variable rate of 6.86%. One month remains, and March inflation is likely to be quite high. It’s easy to see the possibility of a variable rate approaching or exceeding 8% at the May reset, higher than the current rate of 7.12%. Link to comment Share on other sites More sharing options...
ValueMaven Posted April 12, 2022 Share Posted April 12, 2022 May reset rate is a whooping 9.62% !!!!! Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted April 13, 2022 Share Posted April 13, 2022 3 hours ago, ValueMaven said: May reset rate is a whooping 9.62% !!!!! Best type of fixed income exposure there is at the moment. Too bad you can't do more than 10k per year. Link to comment Share on other sites More sharing options...
crs223 Posted April 13, 2022 Share Posted April 13, 2022 It’s a “redistribution” from treasury buyers to those who have $10k to spare (the middle class). I wonder why the USG offers these. Thank you for starting this thread! Link to comment Share on other sites More sharing options...
Gamecock-YT Posted April 13, 2022 Share Posted April 13, 2022 6 hours ago, TwoCitiesCapital said: Best type of fixed income exposure there is at the moment. Too bad you can't do more than 10k per year. Set up a Trust and/or get an EIN to do another 10k each, overpay your income tax for an additional 5k. So a few different ways to get past the limit. Link to comment Share on other sites More sharing options...
thepupil Posted April 13, 2022 Share Posted April 13, 2022 Most recent print has me buying the full amount (I procrastinated a little bit) for 2022. Probably won’t hold but currently accreting 31% of my mortgage interest in I-bonds despite only owning 8% of my mortgage principal in them…love It. Link to comment Share on other sites More sharing options...
FCharlie Posted April 13, 2022 Share Posted April 13, 2022 Hey guys I really appreciate you all bringing this to my attention. I opened an account for my LLC as a place to hold a portion of my cash reserves. It makes absolutely no sense to keep excessive amounts of cash sitting in checking accounts earning 0.02% with this as an alternative..... But as nice as it feels to get paid 7% or 9% on reserves, I must say, all I can think about is that I'm not actually gaining wealth, this is just the amount that everyone who's holding cash is actually losing via decreased purchasing power. Wow. Link to comment Share on other sites More sharing options...
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