By David Enna, Tipswatch.com
Long-time readers know when I use a headline that starts with “My schedule” it means I will be traveling to distant places. And that is true again, starting Friday morning when I will be off to Seoul, South Korea, and then Japan.
Friday morning! This is the time when the I Bond’s new fixed and composite rates will be announced. That’s a big event for Tipswatch.com. I mark these dates on our calendar every year, to avoid any travels. But this is a family trip and the dates suddenly changed, and … I am going.
TreasuryDirect has hinted it may announce the new rates at 12:01 a.m. on Friday, and if that is true, I will succeed in writing an article and updating the site’s various I Bond pages. Normally, however, the announcement comes later in the morning.
While I am gone, I will be 12 hours ahead of U.S. eastern time on Saturday and then 13 hours ahead once daylight savings time ends Sunday morning. (Both South Korea and Japan don’t observe daylight savings time.) I won’t be able to follow U.S. financial news closely and I won’t be able to quickly answer questions posted in the comments.
Here is what is coming up:
Today, 2 p.m. The Federal Reserve will announce its latest rate-cutting decision, which will be to lower the federal funds rate to a range of 3.75% to 4.00%. I won’t write about this but I will be watching for omens of future cuts.
Friday, Oct. 31. As I noted above, Treasury will announce the I Bond’s new fixed rate, variable rate and composite rate sometime in the morning. I have been forecasting the fixed rate at 0.9%, the variable rate at 3.12% and composite rate at 4.03%. Time will tell. At some point I will update the site with possibly very old news.
Thursday, Nov. 13. We are supposed to get an inflation report for October on this date, but the White House has signaled there will be no report because no data have been collected during the government shutdown. Eventually (possibly on this date) Treasury will announce a “calculated” CPI index number for October, based on inflation over the last 12 months. This is from the Code of Federal Regulations:
If the CPI-U for a particular month is not reported by the last day of the following month, we will announce an index number based on the last 12-month change in the CPI-U available. Any calculations of our payment obligations on the inflation-indexed savings bonds that rely on that month’s CPI-U will be based on the index number that we have announced.
This substitute CPI technique is almost certainly going to be applied. It is most crucial for Treasury Inflation-Protected Securities, because it will set daily inflation accrual indexes for December. (When – or if – a real CPI number is released for November, the accruals will more or less auto-adjust to reality.)
All of this will be very interesting and I hope to find time to write about it.
Sunday, Nov. 16. I will post a preview article about the reopening auction of CUSIP 91282CNS6, creating a 9-year, 8-month TIPS. At this point that TIPS is trading on the secondary market with a real yield of 1.68%. It will be interesting to see if Federal Reserve rate cuts push the yield lower (or higher).
Thursday, Nov. 20. I will be just back in the United States after about 24 hours of travel time and I will attempt to write an article on the 10-year TIPS auction result. Expect multiple errors and nonsensical sentences. But I’ll try.
As I prepare to depart, I will leave with with the trailer for “KPop Demon Hunters.” The film has a 95% Rotten Tomatoes score, and has had two of its songs go Number One globally. My pet sitter says, “I am obsessed with this film.” I am sure many of you will love it:
Meanwhile, forgive my delays in answering your questions in the comments and email.
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David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.
Treasury Inflation-Protected Securities 
I come to Korea, Taiwan, and Japan every year. I am basically a snowbird in Asia, so Korea in the fall, Taiwan in the winter, and Japan in the spring. I get three countries, three languages, three cultures. That is enough. Love all three.
I loved KDH and I am old. Definitely cartoonish in places as it is meant to appeal to kids but very touching in places too which will appeal to all ages. I was in a grocery store recently in Korea and there was a young girl singing “Golden” and she knew all the lyrics. So cute. That generation around the world is going to grow up remembering this movie their whole lives. By the way, the animation in the bathhouse scene is fantastic.
This is a great point of view. It is amazing to see how Koreans are embracing Kpop Demon Hunters, even though it was written by an American. Evidence of it is everywhere in Seoul. On the plane over, I watched a truly excellent animated film, “Flow,” the Oscar winner. It was everything an animated film should be, without a single spoken word. It had an Asian “feel” but was made in Latvia.
Here is the YouTube trailer: https://youtu.be/eD06LQzWFTc?si=Cq8Wvnk4uzvzpsTy
Actually Maggie Kang the director and main force behind KDH is Canadian. Many of the people involved in both creating and performing in it are of Korean heritage so chalk one up for the Korean diaspora. You can tell they have a great love for the country and are very aware of some of its annoyances too. Not surprising that the Koreans have embraced it.
Have added “Flow” to my watch list. Looks really good.
Fixed rate announced at 10 Eastern. 0.90 as predicted. Nice call . . .
Have a great trip, Dave! I’m going to Seoul and Tokyo next month. Can’t wait!
I have a Q, why would the rate be announced Friday and not Monday? Isn’t it posted the first business day of May or November?
Not David here, but the cutoff for the October rate is the 31st which has to be purchased no later than 11:59 pm on the 30th. So, any I-Bond purchased on Friday the 31st will get the November rate on the next business day when it is issued by Treasury which is Monday.
Adam, TreasuryDirect used to wait until Nov. 1 and May 1, but during the I Bond mania of 2021 it switched to the earlier time because as Doug notes, an order placed on Friday (the 31st) would get the Nov. 1 rate. But the question remains: When will the rate be announced Friday? This has varied in recent years.
David, I’ve never been able to reconcile the value of my I-bonds reported by TreasuryDirect with my own calculations. Do you have any examples of how to do this?
Are you using the Savings Bond Calculator? It will show an accurate amount, but will not show the last three months of interest for an I Bond held less than 5 years.
Here is a posting I wrote in 2023: https://tipswatch.com/2023/02/21/i-bonds-heres-a-simple-way-to-track-current-value/
The spreadsheet was incredibly helpful. Thank you David!
It’s impressive how you still plan to update the I Bond data despite the time difference.
I have written site updates in Hong Kong, Cairo, Budapest, Buenos Aires, Stockholm, and on and on. Sometimes the task fits in well to my schedule and sometimes it doesn’t. I’ll try.
We’ll be in Japan at the same time. (Also fly back on Nov 20.) If I overhear someone talking about the real yield on TIPs in the Narita lounge, I’ll ask if it’s you.
Give our regards to Mr T
Being previously unaware of this phenomenon, I watched the video clip.
You’re not “too old,” David. This is where a lot of animation and film-making has ended up: excessive “action,” scenes of mayhem, lack of character personality development and plot development, superhero and/or bedlam situations that have nothing to do with the lives and problems of ordinary people or what’s happening in the actual world outside the screen. And hyperactive, forgettable, electronically synthesized music. Above all, imagery technology which has become almost an end in itself (“Let’s unleash this software and really show what this baby can do!”) rather than a means.
That’s my opinion. But then I’m a person who still likes to read books and to watch movies about believably real people in believably real situations and relationships. And, although a senior, I’m gratified to see among my younger friends those also trying to limit the reach, and screech, of technology in their lives.
So now I’ve watched a little bit of KPop Demon Hunters for the first time. And the last. I won’t miss the rest of it, or its brethren creations on any side of the oceans, even one little bit. There’s a finite amount of time in each day, and each life, and I contentedly spend mine elsewhere.
I am a long-time fan of animated films and still love them and watch them often. This particular film begins with a lot of characters yelling instead of talking, and that is an automatic turnoff for me. The music is OK, but a bit numbing. Oh well, I respect the opinions of younger people, so they should dive in and enjoy it.
Enjoy the trip David!
A question: Is it your understanding the inflation accrual index for December 31 will be relied upon for the final calculation of 2025 TIPS OID? And this index will come from the expected “CPI substitute report” for October that may come out around November 13 ?
Great point. That could be true. In my opinion, a calculated 1/12th of annual inflation could end up being a bit too high for non-seasonally adjusted inflation in October, which could be seeing some late-year seasonal effects. It would also enter into your RMD calculation for TIPS held in a traditional IRA.
David: I found your reply confusing: (i) we will NEVER know what the “true” October CPI would have been because the necessary data is not being collected by BLS, (ii) institutional TIPS purchasers may well judge that the “backstop” CPI that Treasury announces for October is “off” because of the seasonal adjustment (and other) factors and those judgments and related uncertainties will affect TIPS market prices, (iii) the only thing that will matter for the 2026 RMD computation with respect to TIPS held in an IRA will be their year end market value.
uukj, we are entering unknown territory with a “calculated” CPI for October, which will almost certainly happen. The calculation should result in a number close to the 0.25% increase in September. I think that could be a little higher than reality, but we have no way to know.
TIPS inflation accruals will be affected throughout December and most of January (assuming the government reopens and we do get a November inflation report). So a person selling or buying a TIPS on the secondary market in that time period will get a price that is slightly off, probably “very slightly.” The market will adjust, most likely slightly lowering the value of TIPS.
From Reuters: “There’s definitely uncertainty in the market around the data itself, which is then exacerbated by the lack of data. So you end up with high risk premium in TIPS and they end up trading cheap,” said Benjamin Wiltshire, global inflation desk strategist at Citi.”
I Bonds won’t be affected much at all because the October number is just the first of six that will set future rates. Future inflation reports will balance off the slight error.
The year-end value of TIPS (and the resulting 1099-OID for taxable TIPS and RMD value for retirement accounts) could also be “slightly off,” since the inflation accruals will be slightly off.
This has never happened before, so there are a lot of things to ponder in the next month.
My grandkids are dressing up as K Pop Demon Hunters for Halloween. Have a great trip and don’t stress about your blog.
Have a great trip. I spent 5 months in Japan, it is a great country. The people are so decent and civilized.