The November 2006 I-Bond

Once again, the Bureau of Labor Statistics has reported the Consumer Price Index for Urban Consumers (CPI-U) for September 2006, which has come in at a level of 202.9 (2.1% higher than one year ago).

For us here at Political Calculations, the release of the inflation number means that we can put our tool for predicting the I-bond's future rate of return to work! Now that we know the inflation values to plug in (the September 2006 value above and the March 2006 value of 199.8, the only question remaining is what will the U.S. Treasury set as the core rate of the I-bond.

For the fixed rate component of the I-bond, we'll guess a low-end and a high-end value. Since the core rate of return for the May 2006 I-bond is 1.4%, we'll enter 1.2% for the low end and 1.6% for the high end value. (The beauty of our tool is that if you don't like these values, you're welcome to change them!)

And that's all you need to predict where the I-bond will be set this November!

I-Bond Fixed Rate Data
Input Data	Values
Fixed Rate (Low End) for I-Bond (%)
Fixed Rate (High End) for I-Bond (%)
Inflation Data
CPI-U for Most Recent of March or September
CPI-U for Next Most Recent of March or September

Predicted I-Bond Rates of Return
Calculated Results	Values
Low End of Range (%)
High End of Range (%)
Middle of Range (%)

Using our default data, we would anticipate the I-bond being set at 4.52%, with the low-end of our prediction range set at 4.32% and the high end at 4.73%, give or take a few hundredths of a percent. We'll see where the Treasury Department sets the rate in November!