March CPI-U numbers released: April 2025 issue I Bonds compelling

The U.S. Bureau of Labor Statistics released the March 2025 Consumer Price Index (CPI-U) inflation data last week, which rose by 0.22% last month.

As always, now (along with the release of the September CPI-U) is one of the best times to consider purchasing I Bonds. The reason for this is that we now know what the rate of return for April 2025 I Bonds will be for both the first and second six month periods, which is important since I Bonds must be held for 12 months before they can be redeemed.

Using the CPI-U data from September 2024 (315.301) and March 2025 (319.799) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for April 2025 issue I Bonds.

That means these bonds would earn a composite rate of 3.11% (using 1.2% fixed & 0.95% variable) for the first 6 months and 4.08% (using 1.2% fixed & 1.43% variable) for the second 6 months. In the current interest rate environment, an April I Bond purchase isn't a bad choice when compared to something like the 52 Week T-Bills @ 3.989% APY that will be issued on 4/17/25

In my opinion, April 2025 I Bonds are a reasonable choice, particularly for the 1.2% fixed rate if you plan to hold them long term. Based on the spread between I Bonds and TIPS, David Enna of tipswatch.com projects that the new fixed rate will fall slightly to 1.10%, which would make a purchase before the end of the month a bit more attractive. FWIW, Mrs. Frugalson and I will be maxing out our 2025 limit before the end of April.

April 2025 Financial Asset Roundup

Here are my current financial assets as of the market close on April 10th, 2025:

Asset	Mar 2025	Apr 2025	Change
Checking	3,639	409	-3,230
Money Market	83,610	80,182	-3,428
Savings Bonds	247,594	248,173	579
Treasurys	110,000	110,000	0
CDs	52,915	62,209	9,294
Brokerage	483,195	443,274	-39,921
401k	451,398	427,644	-23,754
Roth IRA	324,919	307,218	-17,701
IRA	1,570,089	1,541,172	-28,917
529 Savings	170,916	167,117	-3,799
Total Assets	$3,498,275	$3,387,398	-$110,877
			-3.17 %

The S&P 500 has continued to struggle, falling 6.17% (-10.43% YTD) since the last update:

(chart courtesy of nasdaq.com)

April has been a rough month due to the ill-advised global trade war and economic crisis that the US has created. Even though the US blinked during tariff escalation, the chaos and uncertainty this has caused cannot be easily reversed. In a short amount of time we have squandered the strongest economy in the world and turned our country into a global pariah. How can a company plan when a shipping container of goods may be tariffed at one price today and another price tomorrow and what will it be in a week, a month, or 6 months? Why would people across the world want to invest in the US when we are an unreliable partner that would impulsively pull the rug out from under them? I think a recession is imminent and suspect we're in one already and just don't know it yet.

On the jobs front, the unemployment rate for March rose to 4.2%, with a strong 228,000 new jobs created. Since unemployment is a lagging indicator, I anticipate it continuing to rise throughout this year as conditions worsen. Oil prices have dropped to the $60 level (from $67) with that $60 price reflected in a local unleaded regular gasoline price of $2.95 at my last fill-up.

On the financial front, I skipped my usual Fidelity 401k transaction (FSKAX) and Vanguard VTI purchase in my taxable brokerage account because I am not comfortable adding to our equity holdings at this time. I did take an S Corp distribution and my 13 week T-Bills (4.335%) matured and were rolled into new ones at 4.309% while my 4 week T-Bills (4.308%) also matured and were rolled into new ones at 4.293%. In my IRA I bought 20 year T-Bonds at 4.632% and 7 year T-Notes at 4.233% with free cash and will likely participate in the 5 Year TIPS auction next week. I also had an Alliant 5.15% APY 23 month CD mature and moved the proceeds into my Navy Federal 4.75% APY 12 month add-on CD and also opened an Alliant 4.35% APY 17 month "elevated rate" CD offer that I received via email. Those CD rates are pretty attractive right now considering how Fidelity's brokered CD rates have quickly dropped during this crisis:

As for the non-financial, it feels like the world is on fire and I'm having a hard time watching the implosion of my country. I've can't believe I'm saying this, but I've never felt as hopeless about the future as I do now and I don't see that changing any time soon.