Congressional Budget Office explains the Consumer Price Index

Wednesday, July 11th, 2007
Categorized as: Series I US Savings BondsTIPS

The rate paid by Series I Savings Bonds is adjusted every six months based on the current level of the Consumer Price Index for Urban Consumers, or CPI-U.

For those who’d like to have a better understanding of how the Bureau of Labor Statistics calculates the monthly CPI-U, the Congressional Budget Office has recently published a paper that goes into the details.

Click here for a link to the paper, Explaining the Consumer Price Index.

For even more information, see Chapter 17 of the Bureau of Labor Statistics’ Handbook of Methods. Of particular interest is the table showing the weight various categories of goods get in the CPI, which is on pages 66-68 (e.g. price changes in cable and satellite television and radio account for 1.145% of the index; price changes in college tuition and fees account for 1.524%).

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FDIC Insured Certificates of Deposit can pay 1 or 2% more than savings bonds when held for a similar length of time. See top CD Rates Below:

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