New I-Bond Rates 1 May 2005 - Prediction
The treasury will issue new rates on inflation protected savings bonds on May 1 2005. The rate is currently 3.67% (and exempt from state income tax). For those thinking about an I-Bond purchase it may make sense to hold off because
the new rates may be a bit higher than they are now. Here's my prediction:
I-Bond base rate: 1.3% (I believe this is linked to the yield on 5 yr TIPs)
I-Bond Inflation component: 3% (based on the latest data for the CPI-U)
I think the Treasury will announce a rate of about 4.3% or so - high enough that it may pay to wait.
-fg
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I almost fell of my chair when I discovered your prediction on the next I-bond rate! I had been surfing all over the web for months looking for something like that-you are the only one with the guts to try something like this--a thousand thanks! It is really helpful in plotting my financial strategies for the next 6 mos.
It is really just an educated guess. We are so close to the new rates it may make sense to wait and see where they end up.
-fg
"I-Bond base rate: 1.3% (I believe this is linked to the yield on 5 yr TIPs)" - Does it say this anywhere on the Treasure website? It'd be great if there was a way to predict the fixed part of the rate. I personally think the fixed part will stay the same or even go down.
The 5 yr TIP has nosed down since my original post - I still stand by my prediction. Time will tell ...
