Comments on: Savings Bond Alert #015

by: Mario

Tue, 01 Nov 2005 15:42:00 +0000

Another thought on TIPS … for someone buying now, the large inflation hike of the last six months would have already occured, i.e. the TIPS are already adjusted for the CPI-U increase. Therefore, as an alternative investment, someone could not cash in on this inflation hike on TIPS anymore at this point as compared to the I bond which is based on previous rates. Could it be that the drop in fixed rate is somehow connected to the Treasury's forward-looking prediction on TIPS?

by: Mario

Tue, 01 Nov 2005 15:28:00 +0000

The EE bond rate is also down from 3.5% to 3.2% even though the yield on the 10 year treasuries that they are based on have been inching up ever so slowly. Perhaps the Treasury is trying to make savings bonds less attractive and wanting to get everyone to buy markatable treasuries through their new integrated service on TreasuryDirect?

by: Mario

Tue, 01 Nov 2005 15:15:00 +0000

The new fixed rate dropped to 1.00%. The Treasury posts the new rates at 10 am ET. I guess now we know the Treasury does not consider market conditions for setting the rate … unfortunately.

by: Anonymous

Tue, 01 Nov 2005 13:54:00 +0000

So, when do the new rates get posted. It's November 1st and they are still showing the old rates on Treasury Direct.

by: Tom Adams

Thu, 27 Oct 2005 18:10:00 +0000

Why should banks and brokerage firms get a better deal with TIPS than individual investors get with Series I Savings Bonds?

The TIPS rate is determined in the open market and it is what it is.

The I Bond rate should be based on the TIPS rate, not on the Treasury's ability to screw small investors if it wants to.

by: Dan Weber

Wed, 26 Oct 2005 18:19:00 +0000

At first, one might think the Fed would be crazy to be offering I-Bonds at 6.9%, but you have to look at the long-term picture.

Wouldn't they still get buyers if they offered even 5.9% as a current rate? Even at that price they could get a lot of short-term buyers.