BestCashCow Blog

Rates Continue to Fall.

Treasury rates over one year began November by continuing their fall on fears that declining US GDP will lead the Federal Reserve to begin to cut rates. The yield curve is grossly inverted and longer term instruments are less attractive than they were several months ago. Cash equivalent rates and short term instruments (less than 1 year) remain firm.

Series I Bond Rates Improve But Remain Largely Inattractive.

Series I bonds reset on November 1 so that new bonds will pay a rate of 4.52% for the next six months. The fixed rate component was held at 1.40% and the variable component is 1.551%. While this is a dramatic increase in the rate from the 2.41% offered over the last six months, these bonds remain largely unattractive when viewed as a cash equivalent (and therefore should only be purchased as a long-term inflation hedge).