Treasury Inflation-Protected Securities

Nov. 13, 2025: The Inflation Day that wasn’t

Posted on November 14, 2025 by Tipswatch

Kinkaku-ji, Kyoto’s “Golden Pavillion,” first constructed in 1399, rebuilt in 1955.

By David Enna, Tipswatch.com

I am writing this from a hotel room in Kyoto, Japan, 14 hours ahead of Eastern Standard Time. Today is Friday. I believe it is also Friday (but very early) in the United States.

After 43 days of political nonsense, the U.S. government shutdown has now ended, which means I probably will be able to fly home next week. It also means that collecting very important economic statistical data can begin again.

The White House said this week that September and October jobs reports may never be released, even though data were collected for September before the shutdown. The same is true for the October inflation report, since no price data was collected for that month.

White House press secretary Karoline Leavitt announced this while taking one last shot (actually, probably not the last) at Democrats. From Politico:

“Democrats may have permanently damaged the federal statistical system with October CPI and jobs reports likely never being released,” Leavitt told reporters. “All of that economic data released will be permanently impaired, leaving our policy makers at the [Federal Reserve] flying blind at a critical period.”

Kevin Hassert, President’s Trump’s top economic adviser, later clarified that October jobless data will eventually be released, but without an official unemployment rate figure. “That’ll be for just one month,” he said.

The inflation report

Since no price data were collected last month, there is no way to produce a conventional inflation report for October. Nevertheless, a sort-of-official calculated CPI number will have to be announced, and soon, because that will determine inflation accruals for Treasury Inflation-Protected Securities in December, just 17 days away.

Those daily inflation indexes (such as these for November) are crucial for pricing TIPS in the secondary market. Without some sort of index, traders won’t be able to value TIPS accurately. And since we will be getting a calculated CPI estimate, the TIPS market is going to feel some turbulence.

The Bureau of Labor Statistics has posted this note on its site:

BLS will announce revised news release dates on this page as they become available. We appreciate your patience while we work to get this information out as soon as possible, as it may take time to fully assess the situation and finalize revised release dates.

Without the October inflation report the Treasury will probably rely on a calculated non-seasonally adjusted inflation number for October, as noted in 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.

The exact formula is a bit complicated for a lowly journalist, as you can see here:

I am going to guess the October inflation number will end up being around 0.25% based on this 12-month calculation. The October CPI index should be something around 325.6. We’ll see.

The BLS or Treasury will need to announce something soon because the TIPS market will get shaken without data on future market values.

In a report on October 25, Bloomberg speculated on unease in the TIPS market because of potentially inaccurate inflation indexes in December:

The segment of the US Treasury market that offers investors protection against rising consumer prices is headed for uncharted waters …

Jonathan Hill, head of US inflation strategy at Barclays Capital Inc., said the lack of data or questionable data will create stresses in the TIPS market:

If the October CPI isn’t published by the end of November, “the fallback comes into effect,” not just for TIPS but also for inflation swaps, derivative contracts in which a floating interest rate is exchanged for a CPI-based payment, Hill said. “It’s something that’s never come into effect before.”

Even if the data are published on time, doubts about its quality may create volatility, Hill said. …

Interest-rate strategists at Morgan Stanley said in a report this week that “concerns over deteriorating CPI data quality” related to “weaker data collection amid the government shutdown may be weighing on investor demand” for the $2 trillion TIPS market.

It’s worth noting that the real yield of a 10-year TIPS has been holding fairly steady during this shutdown crisis — falling from 1.87% on September 2 to 1.83% at the close on Thursday. During that same period, the nominal yield of a 10-year Treasury note fell from 4.28% to 4.11%. So it is possible that uneasiness over accurate inflation accruals is having an effect on the TIPS market.

Thursday’s reopening auction of a 10-year TIPS — CUSIP 91282CNS6 — should give us some idea of market demand. I plan on posting a preview to that auction sometime on Sunday (or whatever time it is in Japan).

Eventually, when the November and December inflation reports are released based on standard collection of data, the inflation numbers should return to accuracy. This should be — we hope – only a temporary disruption of the TIPS market.

But the continuing resolution only extends government funding to January 30. Will this damaging game start again in 2026?

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Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear. Please stay on topic and avoid political tirades. NOTE: Comment threads can only be three responses deep. If you see that you cannot respond, create a new comment and reference the topic.

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.

Posted in Inflation, Investing in TIPS | Tagged economy, inflation, The Treasury, Treasury investments | 11 Comments

Treasury sets I Bond fixed rate at 0.9%, composite rate of 4.03%

Posted on October 31, 2025 by Tipswatch

By David Enna, Tipswatch.com

There were no surprises in this morning’s announcement of the new fixed and composite rates for U.S. Series I Bonds purchased from November 2025 to April 2026. Treasury followed its past practices, setting the fixed rate at 0.9%, as I projected.

This is a very good thing.

It is important because the Trump administration’s Treasury department continued to follow our “perceived” formula for the fixed rate: Applying a ratio of 0.65 to the average real yield of the 5-year TIPS over the last six months. This formula has worked, without fail, for 12 fixed-rate resets since November 2017.

Can we be sure this will continue to work? No, but it is reassuring to see past practices continued.

The fixed rate is permanent for the life of the I Bond, so it is a key factor in the attractiveness of this investment. While the fixed rate dropped from 1.10% to 0.90% at this reset, getting a guaranteed return of 0.90% above inflation will remain attractive for investors heading into 2026, as short-term Treasury yields continue to decline.

The composite rate

The I Bond’s composite rate is created by combining the fixed rate with an inflation-adjusted variable rate set by inflation over the last six months, in this case for the months of April through September. The current variable rate of 3.12% will apply to all I Bonds, no matter when they were issued.

Here is how the Treasury calculates the composite rate in a formula that combines the fixed rate and current variable rate.

This calculation is for I Bonds issued from November to April. For investors who purchased I Bonds earlier this year with a fixed rate of 1.10%, the new composite rate will be 4.23%. The new rates roll in for six months, depending on the month of the original purchase.

I Bonds remain attractive

New investors through April 2026 will be getting a six-month annualized return of 4.03%, which will be competitive with short-term Treasury bills, with yields that have already fallen below 4% and are likely to continue to decline as the Federal Reserve cuts short-term rates into 2026.

Of course, I Bonds must be held one year (technically about 11 months) before being redeemed, and any redemption before 5 years gets hit with a 3-month interest penalty. For I Bonds with an attractive fixed rate — and 0.90% is attractive — I suggest holding for five years and then redeeming when you need the cash.

Yes, your older I Bonds with fixed rates of 0.0% or 0.1% are less attractive. But even with these you will be earning above 3% over the six months.

I Bonds work well as a secondary emergency fund, constantly adjusting to inflation. There are no state income taxes, and the value of the investment can never decline with “market trends.”

EE Bonds

EE Savings Bonds purchased from November to April will have a fixed rate of interest of 2.5%, down from 2.7% for purchases in October. But Treasury continued is terms that double the value of EE Bonds if held for 20 years:

For EE bonds you buy now, we guarantee that the bond will double in value in 20 years, even if we have to add money at 20 years to make that happen.

At this point — unless short-term rates decline drastically — it is hard to argue that EE Bonds are an attractive investment. You can get about 4.64% on a 20-year Treasury bond.

Travel update

I am writing this from the Atlanta airport, about to get on a 14-hour flight to Seoul, South Korea. I will be “out of pocket” but feel free to discuss these developments in the comments section.

• Confused by I Bonds? Read my Q&A on I Bonds

• Let’s ‘try’ to clarify how an I Bond’s interest is calculated

• Inflation and I Bonds: Track the variable rate changes

• I Bonds: Here’s a simple way to track current value

• I Bond Manifesto: How this investment can work as an emergency fund

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Posted in Cash alternatives, EE Bonds, I Bond, Inflation, TreasuryDirect | 16 Comments

My schedule … and I have a problem

Posted on October 29, 2025 by Tipswatch

An image from “KPop Demon Hunters,” a Korean-inspired film that is the most-watched original offering in Netflix history. I tried to watch it, twice, and failed. Possibly I am “too old.”

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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Posted in Federal Reserve, I Bond, Inflation, Investing in TIPS | Tagged investing, personal-finance | 23 Comments

TreasuryDirect did something right, but I’m still confused

Posted on October 27, 2025 by Tipswatch

Maybe it’s just me?

By David Enna, Tipswatch.com

TreasuryDirect has posted an updated notice about the upcoming change in rates for U.S. Series I Bonds, and this time it almost nailed it.

At times in the distant past, TreasuryDirect would have posted nothing at all about the I Bond rate change. But after the I Bond mania of 2022 it began trying to give investors a heads up about the upcoming changes and when they would actually take effect.

Sometimes the warning was a little too “nuanced” to make effective sense. This is what it posted last year at this exact time:

The logical question was: “What does complete your purchase mean?”
But then, a few days later, it updated that message to say:

Investors can easily get confused when TreasuryDirect says they must “complete” the purchase before midnight Oct. 31. The problem is the meaning of the word “complete.” When you place an order for an I Bond — let’s say on Oct. 30 — it is actually completed on the next business day, Oct. 31.

I liked the wording last year saying you must “request your purchase by 11:59 p.m. Eastern Time on Wednesday, October 30.” That was a clear statement, which corrected the earlier misleading (but technically accurate) alert which said “complete your purchase” by Oct. 31.

So now what?

Clearly the new I Bond rates to be in effect for purchases from November 2025 through April 2026 will be announced on the morning of Oct. 31. (This has been the practice in recent years.) At that point, all purchase requests will be filled as November 2025 issues with the new rates.

This October 2025 alert seems to move up the date of the I Bond purchase by one day, stating you must “complete your purchase” by 11:59 p.m. on October 30. Technically, that means you must “request your purchase” by 11:59 p.m. on October 29.

TreasuryDirect provides a link to questions and answers, which sort of helps:

When will the overall (or, composite) interest rate for I bonds on sale in TreasuryDirect change?

The current rate of 3.98 percent remains until 11:59 p.m. Eastern Time on Thursday, October 30. Then the next rate becomes available at midnight. Savings bond purchases in TreasuryDirect are processed on the next business day, so a bond purchased on October 31 will receive the newest interest rate.

This again raises confusion. If an investor places an order on Oct. 30, does that mean the bond was “purchased” on Oct. 30, even though the sale would not be finalized until Oct. 31? In the past, that has how it has worked. But right now I am not so sure.

To be more accurate, if this is indeed accurate, I think the TreasuryDirect notice should have said:

To receive the current 3.98% rate for I Bonds in TreasuryDirect, you must request your purchase by 11:59 p.m. Eastern Time on Thursday, October 30. The bond would have an issue date of October 2025 and secure the current interest rate.

However, TreasuryDirect’s advice to place orders a day or two early is excellent, no matter how you read it.

The solution: Do not delay!

Many I Bond investors are eager to buy in October to lock in the permanent fixed rate of 1.10% for the life of the savings bond. That rate seems likely to fall to 0.9% at the November 1 reset, even though the composite rate is likely to rise slightly.

See this: September inflation report sets I Bond variable rate at 3.12%

I have been advising I Bond investors to lock in purchases on Tuesday, Oct. 28, to make sure you absolutely, positively will get the October 2025 issue with the 1.10% fixed rate. And yes, it is also likely that Oct. 29 will be fine for you risk takers.

Placing the order on October 30 always seemed risky, and given this new wording from TreasuryDirect, I’d definitely advise against it.

In summary. Regular readers will know I am projecting the November rate reset will drop the fixed rate to 0.90% (pretty certain) from 1.10% and the variable rate will rise from 2.98% to 3.12% (very certain), resulting in a new composite rate of 4.03%, up from the current 3.98%.

However, I believe it is a better move to make the investments in October (no later than Oct. 28) to lock in the fixed rate of 1.10%. You’d get 3.98% for six months and then 4.23% for the next six months.

• Confused by I Bonds? Read my Q&A on I Bonds

• Let’s ‘try’ to clarify how an I Bond’s interest is calculated

• Inflation and I Bonds: Track the variable rate changes

• I Bonds: Here’s a simple way to track current value

• I Bond Manifesto: How this investment can work as an emergency fund

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Follow Tipswatch on X for updates on daily Treasury auctions and real yield trends (when I am not traveling).

Posted in Cash alternatives, I Bond, Inflation, TreasuryDirect | Tagged investing, personal-finance | 20 Comments

TreasuryDirect sends another clear message: Changes are coming

Posted on October 26, 2025 by Tipswatch

By David Enna, Tipswatch.com

A helpful reader alerted me last week that TreasuryDirect was asking investors to clear out their Zero-Interest Certificates of Indebtedness (C of I) holdings. Based on the wording of the email, I’d call it a “warning,” a little more urgent than the “please pay attention” message sent earlier in October about delivering all sets of gift-box I Bonds.

Read about the gift-box messaging here: “TreasuryDirect email is an omen of coming changes.”

What is a C of I?

Basically, it is a lousy deal and probably a throw-back to days when investors didn’t have low-cost brokerage accounts to fund transactions at TreasuryDirect. It is a holding security that pays zero interest. Maybe in the days when your bank was paying 0.05% interest it made sense to use C of I, but today it is only useful for a one- or two-day investment holding, preparing for another purchase.

TreasuryDirect’s User Guide used to encourage use of the C of I:

The Zero-Percent Certificate of Indebtedness (Zero-Percent C of I or simply, C of I) is a Treasury security that does not earn any interest. It is intended to be used as a source of funds for purchasing eligible interest-bearing securities. …

Need one less worry about your security payments? If payments to your bank are returned to us for any reason, the returned funds will be automatically deposited in your C of I. You’re then able to use the deposited funds to purchase additional securities in your account or redeem all or part of them to your bank. It’s your choice.

Unexpected changes in your plans? Choose the option to redeem your C of I, and the amount you enter is redeemed from your C of I and deposited into your designated bank account.

All C of I purchase and redemption activity is conveniently recorded in your C of I History.

But honestly, C of I was literally a worthless and undesirable investment any time your deposits could earn daily interest, such as in a brokerage’s money market account. The email TreasuryDirect sent out last week fully admits this:

Zero-Percent C of I is designed to temporarily hold funds for purchasing other securities. It does not earn interest, so leaving money in this account limits its growth potential. By cashing your C of I or using it to purchase interest-bearing securities, you can put your funds to work immediately! Start taking advantage of investment opportunities and avoid leaving money idle in a non-interest-bearing account.

Here is the full text of the email:

The real message

TreasuryDirect again is clearly telling us that changes — and probably big changes — are coming to its investment process, which will affect both savings bonds and purchases of Treasury bills, notes and bonds. It says:

Please note, there may be changes to Zero-Percent C of I to help streamline the process of investing with the Treasury, so cashing your C of I now will help you prepare. Stay tuned as more information becomes available on how we’re enhancing the TreasuryDirect customer experience.

TreasuryDirect also created an FAQ to reassure investors that the email was legit and to explain why action is needed.

How is Treasury enhancing the experience of TreasuryDirect customers?

We are always looking to improve your experience. Future enhancements are still being determined but we will share information on changes as it becomes available.

Is Zero-Interest C of I changing?

Payroll C of I has already been eliminated. For C of I you currently hold, we are continually evaluating ways to streamline the process of investing with the US Treasury and there may be changes to C of I in the future. We will proactively send communications as more information becomes available.

Is there a deadline for cashing C of I?

Redeeming C of I proactively prepares you for upcoming enhancements while also enabling you to make the most of your investment. … You don’t earn any interest on money you keep in your C of I.

Is redeeming my C of I mandatory?

You are encouraged to cash C of I now to ensure you are prepared for coming enhancements and so you can make the most of your investment.

Take action

I suspect that very few Tipswatch readers actively use C of I, but I know a few do to ease rollover transactions. It’s time to get the money out of there and into your bank or brokerage account. Also, make sure all future maturities will be directed to those accounts instead of to C of I.

An anecdote: I have a friend who changed cities and changed bank accounts to link to TreasuryDirect for maturities. She wasn’t a frequent user of TreasuryDirect. She tried to establish a new connected account and somehow failed.

When her sizable investment matured, the entire amount went into C of I. And then when she tried to remedy this situation, she messed up her login (or security questions) and was locked out of TreasuryDirect. This was during a high-call-in period of I Bond mania and it took her more than a week to get this resolved.

Harry Sit, creator of TheFinanceBuff.com, wrote about a similar — and more serious — problem in September 2023. The article title: “Stay Away from Zero-Percent C of I in TreasuryDirect.”

You would think this Zero-Percent C of I is useless because drawing from and sending to the bank account works just fine and you can at least earn some interest while the money is in your bank account, but some people decide to use Zero-Percent C of I to hold cash in TreasuryDirect.

Sit tells the story of an investor whose account was flagged by Risk Management and placed on “hard lock.” The investor was asked to fill out a notarized FS Form 5444 and was told the time for processing this form was “20 weeks minimum.”

A Boglehead forum member related a similar issue this month:

I got an email from Treasury Direct (2 months ago) saying my account is locked and I will no longer be getting any interest payments and they are holding my interest payments in a non interest bearing account. I had to get my signature notarized which I did and Treasury Direct received my documentation on August 18th. They said it would take 2 weeks to open account. Now they are saying there is no timeframe and the account is still locked.

Sit concludes:

Treat TreasuryDirect as a delicate object. Do as little as possible with it. Stay on the beaten path. Buy your I Bonds. Sell your I Bonds. Use your linked bank account to transact. Don’t use the browser’s back button. Remember your password and your answers to the security questions. Be extra careful not to get your account locked. Use your brokerage account when you buy regular Treasuries. Stay away from Zero-Percent C of I in TreasuryDirect.

Changes are coming

We don’t know what is coming, and if you call and ask you won’t get an answer. But TreasuryDirect is now stepping up the pace of changes:

In September 2024 it ended issuance of paper I Bonds in lieu of a federal tax refund.
In October 2024 it sent investors an email encouraging them to deliver gift-box sets of savings bonds “as soon as possible.” This set off much confusion.
In December 2024 it ended its Payroll Savings Plan for automatic investments in savings bonds. This program dated back to 1942.
In January 2025 it sent out a survey on the use of the gift-box loophole for adding to purchases of savings bonds.
In October 2025 it sent an email strongly encouraging investors to empty out gift-box holdings by delivering them to recipients.
And now, in October 2025 it is encouraging investors to empty out C of I holdings.

I know that several readers are going to comment that they will never use TreasuryDirect and don’t trust it. I do use it, and after a decade-plus of regular use, I trust it. But I am a very experienced user. I still use TreasuryDirect to purchase I Bonds and to roll-over T-bill investments. Those two processes work well for me.

I wonder if the Treasury is considering outsourcing some of the management of TreasuryDirect accounts. I have no basis for this idea, but it looks like TD is trying to simplify its operations and … er … improve the investor experience? At this point, we are all just guessing.

My advice, though … get money out of that C of I account.

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