Posted on our Facebook Forum by Runner Twentysix October 17, 2007.
All data is in to estimate the new variable reset beginning in November for existing I-Bonds.
The CPI-U history for the six month reset period (Mar. 2007-Sep. 2007) is as follows:
Mar. CPI-U 205.352
Apr. CPI-U 206.686
May. CPI-U 207.949
Jun. CPI-U 208.352
Jul. CPI-U 208.299
Aug. CPI-U 207.917
Sep. CPI-U 208.49
The Sep. jump in CPI was large. This brings the new rates up from the trend we were seeing of a dismal reset.
My estimate for the new rates for existing bonds will be the following when their 6-month reset period arrives.
Base----Rate
1.0%----4.07%
1.1%----4.17%
1.2%----4.27%
1.3%----4.38%
1.4%----4.48%
1.6%----4.68%
2.0%----5.09%
3.0%----6.10%
3.3%----6.41%
3.4%----6.51%
3.6%----6.71%
Current I-Bonds are at a 1.3% base rate, which means if you buy them before the end of this month, you will get 3.74% followed by 4.38% at their next reset in 6 months.
If they leave the base rate at 1.3%, new Nov issue bonds would carry a 4.38% rate.
Check the Treasury Direct website www.treasurydirect.gov on October 1, 2007 for the actual new base rate.
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3 comments:
Correction, check the Treasury Direct website November 1 for the new base rate.
Thanks for the great info!
A slight adjustment as it has come to my attention that they round the semi-annual inflation calculation in the formula during calculation, though you would have to own a boatload for this to make a coffee cup's worth of difference.
Base----Rate
1.0%----4.08%
1.1%----4.18%
1.2%----4.28%
1.3%----4.38%
1.4%----4.48%
1.6%----4.68%
2.0%----5.09%
3.0%----6.11%
3.3%----6.41%
3.4%----6.51%
3.6%----6.72%
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