Summary
- Real yields have fallen dramatically since the Treasury’s last rate reset on November 1. The current fixed rate of 0.5% is therefore “above market.”
- Today’s real yields justify a fixed rate of about 0.2% to 0.3%.
- I Bond investors should always seek out the highest fixed rate, and that means buying the full 2019 allocation before May 1.
The U.S. Treasury gives no hint about how it determines the fixed rate for I Bonds. It simply announces the new rate every May 1 and November 1. It’s a mystery. But I’ve been tracking these decisions for a long time, and I believe the 0.5% fixed rate has little chance of continuing.
Read my full analysis on SeekingAlpha.com
Treasury Inflation-Protected Securities 