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March CPI-U Inflation Number Out Wednesday.

Steve58
  |     |   460 posts since 2018

The March CPI-U number is out Wednesday and will be the final input to the inflation number associated with I-bond rate.

I think inflation is going to continue to continue to drop.

A. IF the CPI-U comes in at half the April 2012-19 month over month average at 0.223%, then the I-bonds inflation rate component will compute to 3.17% (yearly rate for 6 months).

B. IF the CPI-U comes in at the March 2012-19 month over month average at 0.445%, then the I-bonds inflation rate component will compute to 3.62% (yearly rate for 6 months).

C. IF the CPI-U comes in at 50% over the March 2012-19 month over month average at 0. 0.668%, then the I-bonds inflation rate component will compute to 4.07% (yearly rate for 6 months).

D. IF the CPI-U comes in at double the March 2012-19 month over month average at 0.891%, then the I-bonds inflation rate component will compute to 4.52% (yearly rate for 6 months).

My guess is the March CPI-U comes in somewhere close to B (302.180). If it is B, then inflation over the last 9 months will be 1.98% which equates to a 2.64% yearly inflation rate. That would say to me that the 5%, 5 year CDs may be a thing of the past.

Steve

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8


JeffinEasternFL
  |     |   744 posts since 2020
There's one 5% (or more) 5% 5 year CD available just posted this am, those who were waiting best JUMP NOW and grab it!
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2
chipcollector
  |     |   111 posts since 2010
Where is it available? Is this the Chase CD ?
I don't have the money but my wife has some. She doesn't like the fact that in 6 months they can take it away.

Maybe the CD at Hyperion Bank?
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2
w00d00w
  |     |   360 posts since 2012
i've seen several articles already advising I Bond holders on how to best execute their exit strategy. wonder if Treasury Direct will get swamped again by investors, this time heading toward the door.
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7
choice1
  |     |   372 posts since 2023
Have an approximate 84% answer to the inflation ibond number based on change from September-February CPI which we know…otherwise pure speculation
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3
w00d00w
  |     |   360 posts since 2012
CPI-U increased from February '22 to March '22 by 1.34%. By comparison, from September '22 to February '23, CPI-U increased by 1.36%
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2
Sanger
  |     |   321 posts since 2022
I watch on fox Business this morning on Stuart Varney show there will be two more rate increases of .25 basis points and after that they will go to neutral for the rest of the year should see more 5% CD rates or even higher according to reliable analysts.
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3
GH1
  |     |   1,058 posts since 2017
That's sounds like the right answer. They can not pause and absolutely not reverse
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2
Sanger
  |     |   321 posts since 2022
HI GH1 I think there will be one last surge of higher. CD rates before the end of the year .
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Steve58
  |     |   460 posts since 2018
My guess for March CPI-U was 302.180. Actual is 0.331% (301.836) which is way less than the March 2012-19 month over month average at 0.445%. The I-bonds inflation rate component will compute to 3.39% (yearly rate for 6 months).

It also means that inflation over the last 9 months was 1.86% which equates to a 2.49% yearly inflation rate.

This is far lower than what I expected which to me means the Fed is going to be less pressured to raise rates much for the rest of the year as far as inflation goes. But there certainly can be many other factors for them to consider.

For perspective, if you ranked today's report with the 2012-19 years, this March inflation rate would rank as the 4th lowest out of 9 years. This could mean that we are likely back to pre-pandemic inflation levels.
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3
Kaight
  |     |   1,192 posts since 2011
https://www.fa-mag.com/news/as-inflation-slows--it-is-time-to-reconsider-those-i-bonds-72779.html
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3
Steve58
  |     |   460 posts since 2018
I bought 70K in Ibonds last October and will cash them in Jan 24 after holding them for 15 months. That way I will pay the 3 month penalty using the lower interest rate just published today. That will compute to 6.56% interest rate for the 15 months I will have held them.
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2
Sanger
  |     |   321 posts since 2022
April 13 I just watched on fox business two more rates increases coming then they will pause and go to neutral for the rest of the year Maria Baltimore is the show I watch every morning they feel very confident. inflation still too high .
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