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even a 2% fixed rate with a posted yield of about 3% won't attract many investors to I-bonds when compared to other alternatives (even a fully liquid money market account will likely earn 4.5% - 5% by then)

Unless investors wise up enough to know that a 2% fixed real rate is fairly decent in the current environment. But when you read that sales of I Bonds recently broke records (due to the enticing current rate of 6.7%), the chances of investors suddenly wising up seem slim indeed.

I thought Ken was the one who proved the Treasury did not, in fact, base the fixed rate on I-bonds on TIPS' fixed rate, even back when the numbers looked close

I seem to recall something like that. But even if they don't base the fixed rate on TIPS, that doesn't mean they are oblivious to it. Regardless of how low the advertised rate would end up being, I just don't see them setting the fixed rate above (or even at) the 5-year (or longer) TIPS rate. That's why, at current TIPS rates, I believe a 2% fixed rate would be the absolute highest we'd see, even if that means a 2.5% advertised rate.

But much can change in a month and a half.

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