Are I-Bonds Predicting a drop in Inflation ?

Interest-Rates / Inflation Nov 24, 2022 - 06:58 PM GMT

A patron commented - Interesting take on inflation: the US Treasury I-bonds (which one can invest $10k each year) will pay an annualized interest from November 1, 2022, through April 2023 of 6.89%, down from the 9.62% rate offered since May 2022. Probably an indicator that the inflation stats that are forthcoming will show we’ve peaked. https://treasurydirect.gov/savings-bonds/i-bonds/i-bonds-interest-rates/

My reply - Yes that's a bit weird. how is November ibond 6.48% when it's supposed to be based on CPILIE, implies CPILIE for November will be 6.5%? What am I missing? Last reported CPI was 8.2%.

Actually looking at the rate it's now 6.89%. so looks like the 6.48% was an estimate. Still 6.89% is 2.31% LESS than CPI. According to the consensus CPI for October is forecast to be 8% vs 8.2%., so we could be finally in for a bullish CPI surprise.

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