Savings Bond Alert #018

Inflation and Series I Savings Bond sales move towards normal

The Consumer Price Index for February, which was released this morning, was 198.7, still a tenth of a point below September's 198.8. The level for March, which will be announced on April 19, will determine the inflation component for the next Series I bond rate.

The next I bond inflation component is likely to be positive, but may set a new record low. Historically, the lowest inflation component has been 0.56%, which was used for I bond rate periods beginning in November 2001.

The 5.70% inflation component being used right now is the highest since I bonds were introduced, so in any case, the component is going to drop dramatically. Here's more information on the I bond inflation component.

Sales of Series I bonds cooled in February to an annual rate of $10.9 billion, down from January's record month of $18.0 billion (annual rate). However, this is still more than double the average I bond sales rate during the last three fiscal years, which has been about $4 billion per year. Here's more information about last month's Savings Bond sales.

A sample of the other stories on the Savings Bond Advisor web site in the last month include:

• Savings Bonds, Living Trusts, and Avoiding Probate
• Suze Orman likes Roth IRAs
• TreasuryDirect refuses to confirm transactions