U.S. Inflation Declines 0.1% In December, Dips To 1.9% For 2018

Summary

  • Bad news for holders of TIPS and I Bonds: Non-seasonally adjusted inflation fell 0.32% in December.
  • Falling energy prices again accounted for almost all the decline in overall inflation.
  • Core inflation remains moderate and steady at 2.2%.

The December inflation number is the third in a six-month string that will determine the I Bond’s new inflation-adjusted variable rate, which will be reset May 1. Three months in, we are looking at -0.48% inflation, which translates to a variable rate of -0.96%.

Read my full analysis on SeekingAlpha.com

Also, I have updated my Tracking Inflation and I Bonds page with the new numbers.

And here are the new February inflation indexes for all TIPS.

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