No, the title of this post is not the analog of “I, Pencil” for bonds. The post is about a new kind of Treasury bond issued by the feds. Financial economist Burton Malkiel, who wrote the article on interest for David R. Henderson, ed., The Concise Encyclopedia of Economics, has an excellent explainer in the Wall Street Journal.

Here’s an excerpt:

Is there a solution for this investing dilemma? Unless you have a huge portfolio, the answer is yes: Invest in U.S. Treasury I Bonds. These bonds pay a fixed rate for the life of the bond, plus the annualized CPI inflation rate. With the interest compounded semiannually, these I Bonds will pay a total annualized interest rate of 7.12% through April 2022, well in excess of any other safe yield obtainable. You can never receive a negative real yield, and the combined interest rate can never be less than zero even if the price level declines. If inflation rises, the rate will go up when it resets in April. In other words, you’re safe from the economy’s current monetary woes and any measures the Fed takes to deal with them.

This is from Burton G. Malkiel, “The Treasury Has a Bond Bargain for You,” Wall Street Journal, December 15, 2021.

Malkiel points out that the returns are exempt from state and local income taxes.

The limit per person is $10,000.