Back in Nov ’22, I updated my view on i-bonds.
The interest rate at the time was 6.48% for all bonds purchased in Nov. ’21 and May ’22. The current yield is 3.94% for those bonds.
Inflation was 7.1% trending down from a high of 9.1% that summer. Since then, inflation hit a low of 3.1% in Nov ’23 and has been drifting upward to 3.5%.
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So, what I am doing with all i-bonds purchased in Nov ’21 and May ’22 ?
– I have rolled them all into short term treasury bills – treasuries that mature within 1 year.
Short term bill rates — around 5% — are yielding more than current i-bond rate and inflation doesn’t seem like it can go much higher from here.
If inflation continues higher, I may start to roll some maturing short term bills into 2 year notes as long as the 2 year yield hovers near 5%.