How the Treasury Decides on the I Bond Fixed Rates?

The Treasury doesn't disclose how it decides on Series I fixed rates, but some speculate that it's tied to the 10-year TIPS rates. That would explain today's 0.10% drop in the fixed rate. Tom Adams at the Savings Bond Advisor blog describes the spread between 10-year TIPS and I Bond fixed rates and shows how the spread has gone down in the last year.