The CPI-U value for December dropped again to 210.228. The two point fall is the 5th consecutive month of deflation measured by the CPI-U.
What does this mean for I Bonds in May? Even if the fixed rate of your current bonds are not enough to offset the negative rate we are likely to see from deflation, the final rate on an I bond will never go below zero. If the current deflation continues, there are no fixed rates previously issued that would offset the deflation rate. It is very possible we will see a 0% rate for May-November.
Even if there is a 0% rate, you are still better off than keeping money under the mattress. Money invested in I Bonds is keeping its value while money under the mattress is losing value.
