While inflation is indeed an "unknown variable," over long periods in the U.S. it has tended to run in the 2.5% to 4% range. So even at the low end of that range it looks like today's I bond should outperform today's EE.

My book includes an extensive look at historical inflation trends if you'd like to go deeper on this question.

In my calculations I assumed your tax rate didn't change, which simplifies things. If your tax rate goes down before you cash the bond, of course, things are even better.

With a fixed base rate of 1.40% and an inflation yield of 3.6% you'd get about 5% composite. Tax deferral adds an extra 1% a year to that at about 22 years if you're in the 35% tax bracket and at 30 years if you're in the 15% bracket.

Of course if inflation ran higher, then I bonds would be even better than TIPS. If you didn't plan on staying invested that long, TIPS would be better.

And it's really hard to figure out how long you'll stay invested, because if rates continue to rise you'll be tempted to rollover your I bonds into new issues with higher base rates. I'm already getting questions about when that makes sense.

I was planning on laying off the I-bonds for another 6 months if it was 1.2% or below, or returning to my monthly purchases if it was 1.6% or above, so of course the Treasury had to make the decision difficult, lol!

Treasury doesn't seem to be in any rush to get the fixed rates back to where they were before 2002.

Wonder if there's any political influence on this fixed rate? The bankers must like a low fixed rate.