Forgive my ignorance of the parlance, but does your bullishness mean you think rates will come down?
I think he means future CPI numbers will be higher / worse than July. That should mean that FED rates should keep going up.
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I think the CPI will resume its rise after the July pause, due to a lack of continued and substantial commodity deflation to bail out the increases in rent, food, etc.
What the Fed will do is harder. Probably 50bp in Sept and then who knows.
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Good discussion about how I-bond interest is calculated. Surprisingly complex.
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Its the govt so…
BTW I heard people are avoiding the limits by setting up LLCs. Not sure if worth the fees, hassle, returns etc.
You can also gift and setup trusts. The trusts, sadly, cannot send or receive gifts.
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Short version - duration risk, plus buying Tips bets on unexpected rise in inflation, so depends on how much was already expected when you bought.
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From your article:
I would be remiss if I didn’t mention Series I Savings Bonds here as well. These bonds are about as good as it gets when it comes to inflation protection without any interest rate risk (read here for more details).
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CPI-U change for August is near zero again, even slightly more negative than was in July. 
For 5 months together we have inflation at 3.01%, that corresponds to 6.02% for next six months for I-Bonds. Question remains for September as we can potentially see negative number again which will eat into the next I-Bond rate to put it below 6%. Still not bad, but not as great as it pays right now at 9.62%
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Interesting approach to rounding at above link:
3.0146% rounded to 3.02, I will stay by my calculation with conventional rounding to 3.01
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Interesting website that computes monthly values for a specified I bond. Also does comparisons of I bonds to bond mutual funds.
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Yet the big stock market panic today was allegedly due to high inflation. What gives?
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Although MoneyOCD’s description of “near zero” for seasonally adjusted CPI-U is accurate, as is his comparison to July, the markets reacted to headline CPI being UP .1% when it was expected to be down by .1%. Additionally, core CPI was up .5% when it was expected to be up only .3%.
The above means several things:
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To many, it means that the Fed will have absolutely no excuse for not raising rates 75bp, and should consider a full percent raise.
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It also means that the “experts” predicting inflation or just as inept as the “experts” who predict non-farm payrolls. They are eternally “surprised” by “unexpected” data.
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It also means that the U.S. dollar is going to strengthen even more than it has because of the big rate hike. This will not be great news for companies that have significant exports, nor for domestic companies who have broad competition from imports. Additionally, the strong dollar will seem to make gold cheaper.
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Feds calculate, as all should know, rate for I-Bonds based on non-seasonally adjusted numbers, inflation for the month was -0.04%, which is near zero.
Markets reacted not to that number but to
- Seasonally adjusted readings (+0.1% overall and +0.6% core)
vs. - Expectation (-0.1% overall and +0.3% core)
Both of them have nothing to do with I-Bonds rates
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Here’s what tipswatch says about the iBond rate
For I Bonds. The August report is the fifth in a six-month series that will set the I Bond’s new variable rate, which will begin rolling out November 1 for all I Bonds. As of August, inflation has run at a rate of 3.02%, which would translate to an I Bond variable rate of 6.04%, lower than the current rate of 9.62%. However, one month remains.
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probably a long shot, but there’s a Senate bill to raise the I bond limit to $30k from $10k.
Gotta keep up with inflation on the inflation bond limits!
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Unfortunately, that’s about a year and a half too late.
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As recently as March, the 5-year TIPS was below -1.5%. As of yesterday (Sep. 26) it was +1.58% — a sharp ~300 basis points rebound in the course of around six months.
Looks like it’s now closer to +1.75-2.00% real for TIPS. The very short dated yields are reliable due to trickiness about their last payments and principle adjustments, but a few years out should be fine.
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Better late than never 