Unexpectedly Intriguing!
October 18, 2006

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!

About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

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