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.
Treasury Inflation-Protected Securities 
Real and nominal yields tend to move together, higher or lower. In the same direction, but not necessarily by the…