Tipswatch - Guessing I Bonds fixed rate, May 1, 2023

[GreendaleCC]

I’ve been getting a lot of questions from readers asking: “Do you think the Treasury will raise the I Bond’s fixed rate on May 1? And what should we do about it?

https://tipswatch.com/2023/03/09/i-bond ... ate-reset/

[peteyboy]

Thanks for posting this.

[GreendaleCC]

No problem, I’ve been eagerly awaiting current thinking on this here in BH, so was glad to see Tipswatch revisited it now.

[GreendaleCC]

I’m a big fan of this mega thread.

However, I created a separate post for this new Tipswatch article because I don’t think most BH visitors are checking page 95 of this thread to stay up-to-date on what’s new with I bonds. I recognize this may not align with admin and moderator philosophies.

[LadyGeek]

^^^ Thanks for the explanation. I have split your thread back into a stand-alone discussion.

(This thread was originally stand-alone, merged into I Bonds Mega Thread (I Bond Heads Rejoice!), then split back into a stand-alone thread. Let's leave it here.)

[GreendaleCC]

Thanks, LadyGeek!

[Kinkajou82]

Thanks for sharing that link. The fixed rate of I Bonds has definitely got my attention lately. This time last year I simply took it on face value that it was whimsical and my best guess was it was based on "demand" for I Bonds, but obviously now I'm learning better.

That said, a lot of what I like about I Bonds is their surety. I don't have to "guess" or predict anything with these, that's fraught with stress and trying to predict the future, too much mental load for me right now. I just want to make a plan and stick to it and get predictable results. So my current process moving forward is to buy at the FIRST opportunity in the year when there's a fixed rate above 0% (this year I bought in January) and if it's still 0% in November I can buy then anyways.

I can see evidence that there is a way to anticipate fixed rates for I Bonds in this and other explorations of the topic, I got (extremely tiny) dollar signs in my eyes when this article suggested it could go to 0.6, 0.8, or even 1%! But I'm worried about the up and down personal emotional swings of starting to treat this in what is starting to feel like market timing.

[GreendaleCC]

But I'm worried about the up and down personal emotional swings of starting to treat this in what is starting to feel like market timing.

Good point!

[anon_investor]

But I'm worried about the up and down personal emotional swings of starting to treat this in what is starting to feel like market timing.

Good point!

Go 50%/50% and call it a year. That is what I am leaning towards.

[Chuck]

It would be nice if the fixed rate was at least enough to pay the tax on the inflation component, otherwise it is guaranteed to be net negative after tax, which to me is not a good long term investment.

[peteyboy]

But I'm worried about the up and down personal emotional swings of starting to treat this in what is starting to feel like market timing.

Good point!

Go 50%/50% and call it a year. That is what I am leaning towards.

+1 on the 50/50.

[Drew31]

But I'm worried about the up and down personal emotional swings of starting to treat this in what is starting to feel like market timing.

Good point!

Go 50%/50% and call it a year. That is what I am leaning towards.

+1 on the 50/50.

Another vote for 50/50. Planning half this month and another half in May. My approach to limiting anticipated regret.

[QuiGonJohn]

Read the article at the top of this thread. But I still do not understand how, since the FED has been consistently raising the interest rate, even back before the big jump in the iBond rate in May 2022. Yet somehow the iBond inflation rate dropped in November 2022 and now people (like the article writer) are saying it will probably drop some more in May 2023. This just makes no sense to me.

[Kenkat]

I wonder if we are going to see a fairly rapid loss of interest in iBonds among investors newer to them that got in when they had a composite rate of 9.62% now that the new composite rate is looking more like something in the 3.5-4% range starting in May of 2023.

[tibbitts]

I wonder if we are going to see a fairly rapid loss of interest in iBonds among investors newer to them that got in when they had a composite rate of 9.62% now that the new composite rate is looking more like something in the 3.5-4% range starting in May of 2023.

"Fairly small"? Maybe more like "complete."

[Kinkajou82]

But I'm worried about the up and down personal emotional swings of starting to treat this in what is starting to feel like market timing.

Good point!

Go 50%/50% and call it a year. That is what I am leaning towards.

+1 on the 50/50.

Another vote for 50/50. Planning half this month and another half in May. My approach to limiting anticipated regret.

Don't you mean 33%/33%/33%? There are three distinct buying periods in a year for I Bonds aren't there?

[tibbitts]

Good point!

Go 50%/50% and call it a year. That is what I am leaning towards.

+1 on the 50/50.

Another vote for 50/50. Planning half this month and another half in May. My approach to limiting anticipated regret.

Don't you mean 33%/33%/33%? There are three distinct buying periods in a year for I Bonds aren't there?

Maybe it depends if you mean calendar year, or I-bond year.

[Kinkajou82]

Go 50%/50% and call it a year. That is what I am leaning towards.

+1 on the 50/50.

Another vote for 50/50. Planning half this month and another half in May. My approach to limiting anticipated regret.

Don't you mean 33%/33%/33%? There are three distinct buying periods in a year for I Bonds aren't there?

Maybe it depends if you mean calendar year, or I-bond year.

Ohhh I understand now

[GreendaleCC]

Good point!

Go 50%/50% and call it a year. That is what I am leaning towards.

+1 on the 50/50.

Another vote for 50/50. Planning half this month and another half in May. My approach to limiting anticipated regret.

Don't you mean 33%/33%/33%? There are three distinct buying periods in a year for I Bonds aren't there?

I was thinking the same thing

[ramram22]

I wonder if we are going to see a fairly rapid loss of interest in iBonds among investors newer to them that got in when they had a composite rate of 9.62% now that the new composite rate is looking more like something in the 3.5-4% range starting in May of 2023.

Why would 4% be terrible? You’re still getting ~7% right now for six months, so that would give you a blended average of 5.5% for the year. If the Fed is to be believed, interest rates may reach that level this summer, at which point half the year is already gone.

Plus, there’s already been a recent uptick in inflation, belying the claim that some made that inflation was over. Also, some now believe that rates can’t go as high because of the SV Bank mess. Who knows? But with I bonds, I can still defer taxes until I actually need the money. They still look pretty attractive to me.

[ustaad9]

Agreed

[ustaad9]

Good point!

Go 50%/50% and call it a year. That is what I am leaning towards.

+1 on the 50/50.

Another vote for 50/50. Planning half this month and another half in May. My approach to limiting anticipated regret.

Don't you mean 33%/33%/33%? There are three distinct buying periods in a year for I Bonds aren't there?

How do you mean? I lost you there.

[fuddbogle]

How do you mean? I lost you there.

Before April 30th
BTW May 1st and November 1st
After November 1st

Or close to those dates.

So 3 different rates or times to buy.

[ustaad9]

How do you mean? I lost you there.

Before April 30th
BTW May 1st and November 1st
After November 1st

Or close to those dates.

So 3 different rates or times to buy.

Thanks. However, in terms of 12-month visibility, there are only two points, the middle of April and October so why would you buy any other time?

[vtMaps]

Thanks. However, in terms of 12-month visibility, there are only two points, the middle of April and October so why would you buy any other time?

Maybe you don't buy in October because you think you'll get a better fixed rate in November. --vtMaps

[Kenkat]

I wonder if we are going to see a fairly rapid loss of interest in iBonds among investors newer to them that got in when they had a composite rate of 9.62% now that the new composite rate is looking more like something in the 3.5-4% range starting in May of 2023.

"Fairly small"? Maybe more like "complete."

I said “fairly rapid”?

[Kenkat]

I wonder if we are going to see a fairly rapid loss of interest in iBonds among investors newer to them that got in when they had a composite rate of 9.62% now that the new composite rate is looking more like something in the 3.5-4% range starting in May of 2023.

Why would 4% be terrible? You’re still getting ~7% right now for six months, so that would give you a blended average of 5.5% for the year. If the Fed is to be believed, interest rates may reach that level this summer, at which point half the year is already gone.

Plus, there’s already been a recent uptick in inflation, belying the claim that some made that inflation was over. Also, some now believe that rates can’t go as high because of the SV Bank mess. Who knows? But with I bonds, I can still defer taxes until I actually need the money. They still look pretty attractive to me.

I am not saying they are unattractive to people that understand how they work, but I think many new people bought them thinking they were getting an interest rate of 9.62% or 6.89% when they were really only getting a fixed rate of 0% or 0.4% plus a fleeting inflation adjustment. So now that money markets and CDs are available for 4.5%, 5% or higher, I think people will be less inclined to stick with iBonds unless the fixed rate comes in quite a bit higher.

[tibbitts]

I wonder if we are going to see a fairly rapid loss of interest in iBonds among investors newer to them that got in when they had a composite rate of 9.62% now that the new composite rate is looking more like something in the 3.5-4% range starting in May of 2023.

"Fairly small"? Maybe more like "complete."

I said “fairly rapid”?

Sorry, I have no idea how I read it any other way.

[N.Y.Cab]

I expect to be disappointed with below 1% fixed rate. That's fine, I can keep rolling in short-term Treasury with the little spare cash after contributing to HSA, 401k and Roth.

[QuiGonJohn]

I am not saying they are unattractive to people that understand how they work, but I think many new people bought them thinking they were getting an interest rate of 9.62% or 6.89% when they were really only getting a fixed rate of 0% or 0.4% plus a fleeting inflation adjustment. So now that money markets and CDs are available for 4.5%, 5% or higher, I think people will be less inclined to stick with iBonds unless the fixed rate comes in quite a bit higher.

I am not disillusioned with iBonds because they don't stay at the 9.62% I started with. Rather I am disappointed because, DESPITE the FED continually raising interest rates, Treasury lowered the rate on iBonds once, in Nov, and now pundits say they will do so going into May. To me, what they are doing is like price-fixing. They just wanna be "cheap" and pay us less, in a climate that is fostering higher and higher rates. Not only the FED increases, but most financial institutes are paying more. I have a large cash reserve in Am Ex HYS and have seen that climb from 0.49876% Jan 2022 to last increase in Feb 2023 went to 3.44030%. As a result, I currently do not see myself buying any more iBonds. Bought 20K in May 2022 (wife & I).

[tibbitts]

I am not saying they are unattractive to people that understand how they work, but I think many new people bought them thinking they were getting an interest rate of 9.62% or 6.89% when they were really only getting a fixed rate of 0% or 0.4% plus a fleeting inflation adjustment. So now that money markets and CDs are available for 4.5%, 5% or higher, I think people will be less inclined to stick with iBonds unless the fixed rate comes in quite a bit higher.

I am not disillusioned with iBonds because they don't stay at the 9.62% I started with. Rather I am disappointed because, DESPITE the FED continually raising interest rates, Treasury lowered the rate on iBonds once, in Nov, and now pundits say they will do so going into May. To me, what they are doing is like price-fixing. They just wanna be "cheap" and pay us less, in a climate that is fostering higher and higher rates. Not only the FED increases, but most financial institutes are paying more. I have a large cash reserve in Am Ex HYS and have seen that climb from 0.49876% Jan 2022 to last increase in Feb 2023 went to 3.44030%. As a result, I currently do not see myself buying any more iBonds. Bought 20K in May 2022 (wife & I).

Well as you know the variable rate isn't something the Treasury decides based on market factors; it's just a calculation. So "they" didn't lower the rate. Now, you can argue with the calculation, but it's not like the fixed portion where they may be considering the environment to some extent in setting the rate, and have some flexibility.

[QuiGonJohn]

Well as you know the variable rate isn't something the Treasury decides based on market factors; it's just a calculation. So "they" didn't lower the rate. Now, you can argue with the calculation, but it's not like the fixed portion where they may be considering the environment to some extent in setting the rate, and have some flexibility.

Well if that's the case, then the numbers they are basing the calculations on are "fabricated" to tell a different story. Inflation is still bad. Just shopped, 16oz bottle of Kraft Salad Dressing, that was $2.52 before Jan 2021, now was $5.99. Many other items similar story.

[ustaad9]

Thanks. However, in terms of 12-month visibility, there are only two points, the middle of April and October so why would you buy any other time?

Maybe you don't buy in October because you think you'll get a better fixed rate in November. --vtMaps

Fair point but fixed rate portion of the ibond rate, by design, plays a second fiddle to the variable rate because Uncle Sam markets ibonds to the masses as an inflation-indexed product so the final impact of the fixed rate on the total ibond rate generally remains marginal (unless the fixed rate shoots up in 2-3% range). So why would anyone make a decision on when to buy based on the fixed rate which plays a marginal role? That was the thought behind my earlier comment.

[Kenkat]

I am not saying they are unattractive to people that understand how they work, but I think many new people bought them thinking they were getting an interest rate of 9.62% or 6.89% when they were really only getting a fixed rate of 0% or 0.4% plus a fleeting inflation adjustment. So now that money markets and CDs are available for 4.5%, 5% or higher, I think people will be less inclined to stick with iBonds unless the fixed rate comes in quite a bit higher.

I am not disillusioned with iBonds because they don't stay at the 9.62% I started with. Rather I am disappointed because, DESPITE the FED continually raising interest rates, Treasury lowered the rate on iBonds once, in Nov, and now pundits say they will do so going into May. To me, what they are doing is like price-fixing. They just wanna be "cheap" and pay us less, in a climate that is fostering higher and higher rates. Not only the FED increases, but most financial institutes are paying more. I have a large cash reserve in Am Ex HYS and have seen that climb from 0.49876% Jan 2022 to last increase in Feb 2023 went to 3.44030%. As a result, I currently do not see myself buying any more iBonds. Bought 20K in May 2022 (wife & I).

Here’s the thing though - the fixed rate actually increased in November. From 0% to 0.4%. The remaining number (the inflation adjustment) is a calculation as pointed out already.

I think many people misunderstood this. Mainstream media didn’t help. People were under the impression they were buying something that acted like a familiar product like a CD or a savings account, They weren’t.

[b4nash]

Well if that's the case, then the numbers they are basing the calculations on are "fabricated" to tell a different story. Inflation is still bad. Just shopped, 16oz bottle of Kraft Salad Dressing, that was $2.52 before Jan 2021, now was $5.99. Many other items similar story.

Kraft salad dressing is $2.98 right now at my Walmart. $1.97 for the store brand.

[StewedCarrot]

Thanks. However, in terms of 12-month visibility, there are only two points, the middle of April and October so why would you buy any other time?

Maybe you don't buy in October because you think you'll get a better fixed rate in November. --vtMaps

Fair point but fixed rate portion of the ibond rate, by design, plays a second fiddle to the variable rate because Uncle Sam markets ibonds to the masses as an inflation-indexed product so the final impact of the fixed rate on the total ibond rate generally remains marginal (unless the fixed rate shoots up in 2-3% range). So why would anyone make a decision on when to buy based on fixed rate which plays a marginal role? That was my thought behind my earlier comment.

McQ ran the numbers:
viewtopic.php?t=389349

Does your analysis agree?

[Kenkat]

Well if that's the case, then the numbers they are basing the calculations on are "fabricated" to tell a different story. Inflation is still bad. Just shopped, 16oz bottle of Kraft Salad Dressing, that was $2.52 before Jan 2021, now was $5.99. Many other items similar story.

Kraft salad dressing is $2.98 right now at my Walmart. $1.97 for the store brand.

Ken’s Steakhouse varieties $1.99 at Kroger if you buy 5 items in the promo group. Usually $3.99; $2.98 everyday at Walmart. I saw Kraft salad dressing for $1.99 a few weeks ago at Kroger under a similar promo.

I see so many people just pay full price for grocery items when you can shop around and/or use coupons and sales to save a lot of money.

[tibbitts]

Well if that's the case, then the numbers they are basing the calculations on are "fabricated" to tell a different story. Inflation is still bad. Just shopped, 16oz bottle of Kraft Salad Dressing, that was $2.52 before Jan 2021, now was $5.99. Many other items similar story.

Kraft salad dressing is $2.98 right now at my Walmart. $1.97 for the store brand.

Ken’s Steakhouse varieties $1.99 at Kroger if you buy 5 items in the promo group. Usually $3.99; $2.98 everyday at Walmart. I saw Kraft salad dressing for $1.99 a few weeks ago at Kroger under a similar promo.

I see so many people just pay full price for grocery items when you can shop around and/or use coupons and sales to save a lot of money.

I agree that many other people could shop more carefully, but it's probably safe to assume that Bogleheads are putting the same maximum effort into finding values now as they always have, but are still paying considerably more than they were previously.

[Drew31]

+1 on the 50/50.

Another vote for 50/50. Planning half this month and another half in May. My approach to limiting anticipated regret.

Don't you mean 33%/33%/33%? There are three distinct buying periods in a year for I Bonds aren't there?

Maybe it depends if you mean calendar year, or I-bond year.

Ohhh I understand now

I thought I posted yesterday to clarify what I meant but guess it didn't submit. In my situation, I wasn't considering the Nov reset as funds under that rate will be purchased in 2024. So my decision comes down to the current rate or the May reset. So my plan is just to hedge my bet and do half now and half in May and consider it a form of minimizing anticipated regret.

[ustaad9]

Thanks. However, in terms of 12-month visibility, there are only two points, the middle of April and October so why would you buy any other time?

Maybe you don't buy in October because you think you'll get a better fixed rate in November. --vtMaps

Fair point but fixed rate portion of the ibond rate, by design, plays a second fiddle to the variable rate because Uncle Sam markets ibonds to the masses as an inflation-indexed product so the final impact of the fixed rate on the total ibond rate generally remains marginal (unless the fixed rate shoots up in 2-3% range). So why would anyone make a decision on when to buy based on fixed rate which plays a marginal role? That was my thought behind my earlier comment.

McQ ran the numbers:
viewtopic.php?t=389349

Does your analysis agree?

Generally, yes. But why would you hold 0% fixed rate ibonds for 30 years or even 10 years if higher rate is available? Most people would switch after five years or after paying penalty. The model used is static and does not account for this change. I’m only saying that the model exaggerates the difference in value growth. You can make the argument that people who wait till May 2023 will most certainly get a better rate than the ones who bought earlier at 0.4% fixed rate. The problem is that it is very difficult to predict the fixed rate so when the variable rate is high, get what you can. I would also argue that the earlier higher variable rate compounds your principal quicker initially and it takes a sting of the latter lower variable rate to some extent. Also, unless you’re very young, most people don’t plan on holding the bond until full maturity anyways. People nearing the retirement are going to use ibonds to build a nest egg for the intervening period until they reach full retirement.

[QuiGonJohn]

Well if that's the case, then the numbers they are basing the calculations on are "fabricated" to tell a different story. Inflation is still bad. Just shopped, 16oz bottle of Kraft Salad Dressing, that was $2.52 before Jan 2021, now was $5.99. Many other items similar story.

Kraft salad dressing is $2.98 right now at my Walmart. $1.97 for the store brand.

Yes, when I shop and find these outliers I note it on my shopping list and make a trip to Walmart or Aldi's. These stores are really taking advantage of people and the situation. Jacking prices thru the roof to see if they can get away with it. This was Winn-Dixie where they say "it's a Winn-Win" but only for them if you just buy and don't watch the prices closely. I'm bad. Everytime I come across some outrageous price I start cursing loudly about it to make it obvious.

[GreendaleCC]

Well if that's the case, then the numbers they are basing the calculations on are "fabricated" to tell a different story. Inflation is still bad. Just shopped, 16oz bottle of Kraft Salad Dressing, that was $2.52 before Jan 2021, now was $5.99. Many other items similar story.

Kraft salad dressing is $2.98 right now at my Walmart. $1.97 for the store brand.

Yes, when I shop and find these outliers I note it on my shopping list and make a trip to Walmart or Aldi's. These stores are really taking advantage of people and the situation. Jacking prices thru the roof to see if they can get away with it. This was Winn-Dixie where they say "it's a Winn-Win" but only for them if you just buy and don't watch the prices closely. I'm bad. Everytime I come across some outrageous price I start cursing loudly about it to make it obvious. I'm bad. Everytime I come across some outrageous price I start cursing loudly about it to make it obvious.

You give it a dressing-down?

[Doom&Gloom]

Well if that's the case, then the numbers they are basing the calculations on are "fabricated" to tell a different story. Inflation is still bad. Just shopped, 16oz bottle of Kraft Salad Dressing, that was $2.52 before Jan 2021, now was $5.99. Many other items similar story.

Kraft salad dressing is $2.98 right now at my Walmart. $1.97 for the store brand.

Yes, when I shop and find these outliers I note it on my shopping list and make a trip to Walmart or Aldi's. These stores are really taking advantage of people and the situation. Jacking prices thru the roof to see if they can get away with it. This was Winn-Dixie where they say "it's a Winn-Win" but only for them if you just buy and don't watch the prices closely. I'm bad. Everytime I come across some outrageous price I start cursing loudly about it to make it obvious. I'm bad. Everytime I come across some outrageous price I start cursing loudly about it to make it obvious.

You give it a dressing-down?

Seems fruitless though.

[lws]

I am not saying they are unattractive to people that understand how they work, but I think many new people bought them thinking they were getting an interest rate of 9.62% or 6.89% when they were really only getting a fixed rate of 0% or 0.4% plus a fleeting inflation adjustment. So now that money markets and CDs are available for 4.5%, 5% or higher, I think people will be less inclined to stick with iBonds unless the fixed rate comes in quite a bit higher.

I am not disillusioned with iBonds because they don't stay at the 9.62% I started with. Rather I am disappointed because, DESPITE the FED continually raising interest rates, Treasury lowered the rate on iBonds once, in Nov, and now pundits say they will do so going into May. To me, what they are doing is like price-fixing. They just wanna be "cheap" and pay us less, in a climate that is fostering higher and higher rates. Not only the FED increases, but most financial institutes are paying more. I have a large cash reserve in Am Ex HYS and have seen that climb from 0.49876% Jan 2022 to last increase in Feb 2023 went to 3.44030%. As a result, I currently do not see myself buying any more iBonds. Bought 20K in May 2022 (wife & I).

Here’s the thing though - the fixed rate actually increased in November. From 0% to 0.4%. The remaining number (the inflation adjustment) is a calculation as pointed out already.

I think many people misunderstood this. Mainstream media didn’t help. People were under the impression they were buying something that acted like a familiar product like a CD or a savings account, They weren’t.

This is why financial literacy is so important.

[chem6022]

Thanks for posting the link, it was a good read.

Last year I did my own pattern matching or reading of tea leaves guessing how the fixed rates are set. One thing I think a lot of articles get wrong is that there is definitely a lag in the information the treasury has on real-rates when they make the decision versus when the new fixed is announced. A lag of 2 months is entirely possible, given the speed of government. Second, I think the look-back period could be even longer like 12 months instead of 6 in the article, based on how the fixed rate trails the change in real rate patterns. All in all they may be using averages over real rates going back 14 months or more (12 months look-back + 2 months lag).

Anyway those are just my observations by eye, but I been hoping to find some time to try to spreadsheet the data like tipswatch has done. I wonder if someone has already compiled the data into a spreadsheet?

[Tom_T]

Tipswatch with a quick morning update...

February is the fifth month of a six-month string that will determine the I Bond’s new inflation-adjusted variable rate. Through the five months, inflation has run at 1.36%, which would translate to a variable rate of 2.72%. One month remains, so it looks like the new variable rate should fall into a range of about 3.2% to 3.5%, down substantially from the current 6.48%. The I Bond’s fixed rate will also be reset May 1, but the outlook for that reset is high uncertain, given the volatility of real yields over the last week.

[tj]

I wonder if we are going to see a fairly rapid loss of interest in iBonds among investors newer to them that got in when they had a composite rate of 9.62% now that the new composite rate is looking more like something in the 3.5-4% range starting in May of 2023.

"Fairly small"? Maybe more like "complete."

I didn't bother buying any in 2023. The current rate isn't enough higher than Money Markets to bother with, IMO. I bought $10k in 2021 and 2022, I'm good. If the i bond rates go lower than my 2.25% auto loan, then I'll wait 3 months, cash in and pay off my car.

[Tom_T]

I wonder if we are going to see a fairly rapid loss of interest in iBonds among investors newer to them that got in when they had a composite rate of 9.62% now that the new composite rate is looking more like something in the 3.5-4% range starting in May of 2023.

"Fairly small"? Maybe more like "complete."

I didn't bother buying any in 2023. The current rate isn't enough higher than Money Markets to bother with, IMO. I bought $10k in 2021 and 2022, I'm good. If the i bond rates go lower than my 2.25% auto loan, then I'll wait 3 months, cash in and pay off my car.

I have a lot from late 2021-early 2022 (spouse, gifts, etc.), but I was not planning on holding them long-term. If the next variable rate collapses, I'll probably redeem these bonds once their six-month periods at 6% are over.

[Chuck]

I have deferred a lot of spending while I-bond rates were sky-high. I will be redeeming a lot starting in May.

[tibbitts]

I have deferred a lot of spending while I-bond rates were sky-high. I will be redeeming a lot starting in May.

I don't think I'd be that quick to redeem generally, since most of us will still have higher variable rates on our bonds for many months even if the rates fall in May. And then you have to wait months for the penalty to roll off at lower rates.