Hello, YieldAlley readers! In this issue:
I-Bonds Set for Modest Bump: 4.02% Rate Expected for November
U.S. Markets Advance as Inflation Cools and Fed Signals Continued Easing
OKX Crypto: $500 Total Bonus via $200 Referral + 10% Deposit Match
Will Tesla Launch Unsupervised FSD Before the End of the Year?
And more!
NEWS
Standout Stories
🌟 Why I Don’t Own Any Gold. (A Wealth of Common Sense)
📈 2025’s Winners and Losers, From Gold to Small-Cap Stocks (Morningstar)
🤔 How Many Stocks Outperform the Stock Market? (A Wealth of Common Sense)
🏝️ What’s More Important Than a Safe Withdrawal Rate? (Retirement Manifesto)
📋 Last Quarter Checklist for 2025 (MyPlanIQ)
MARKET THOUGHTS
U.S. Markets Advance as Inflation Cools and Fed Signals Continued Easing
ECONOMY
The Bureau of Labor Statistics released September inflation data on Friday, October 24, more than a week behind schedule due to the ongoing federal government shutdown, showing headline CPI increased to 3.0% year-over-year from 2.9% in August but came in below the Bloomberg consensus estimate of 3.1%, while core inflation also registered 3.0%, slightly down from the prior month. An early reading of S&P Global's purchasing managers' indexes indicated business activity strengthened in October, with the composite PMI rising to 54.8 from 53.9 in September, marking the 33rd consecutive month of expansion above 50, driven by service sector strength at 55.2 while manufacturing PMI edged up to 52.2 though manufacturer optimism fell to its second-lowest level since June 2024 amid tariff and policy uncertainty concerns. Federal Reserve Chair Jerome Powell reinforced expectations for continued monetary easing, emphasizing that "downside risks to employment" have shifted the balance of risks and signaling the central bank remains on track to cut short-term interest rates again this year despite above-target inflation, while the Fed's Beige Book revealed mixed economic conditions with activity little changed, employment holding steady, wages rising, but consumer spending "inching down" and more employers reducing headcounts through layoffs and attrition.
STOCKS
U.S. equity markets advanced for the week with the S&P 500 rising 1.9% to 6,664, the Dow Jones Industrial Average gaining 1.6% to 46,191, and the Nasdaq Composite climbing 2.1% to 22,680, recovering from Thursday's worst single-day decline since April that was triggered by regional banking concerns after two banks disclosed fraud-related loan problems, pushing the CBOE Volatility Index to its highest level since April. Small- and mid-cap indices demonstrated particular strength, with the Russell 2000 surging 2.4% to 2,452 and the S&P MidCap 400 advancing 2.0% to 3,224, outperforming large-caps amid early-week momentum from de-escalating U.S.-China trade tensions and artificial intelligence sector deal announcements. Third-quarter earnings season began robustly with major financial institutions including JPMorgan Chase, Citigroup, and Wells Fargo all exceeding consensus estimates, and 86% of the approximately 12% of S&P 500 companies that reported beating earnings expectations according to FactSet data, though growing investor concerns emerged about credit market risks following recent subprime auto lender and auto parts company bankruptcies that added uncertainty about regional banking sector health.
FIXED INCOME
U.S. Treasuries posted positive returns as yields moved in opposite directions across the curve, with one- and three-year yields ending higher while 10-year Treasury yields declined to their lowest level since October 2024 on Thursday, driven by regional banking concerns, the ongoing federal government shutdown impacting dataflow and monetary policy expectations, and dovish Federal Reserve commentary reinforcing expectations for continued monetary easing. Municipal bonds showed strong performance aided by robust cash flow and healthy investor demand efficiently absorbing heavy new issuance amid limited supply, with traders noting strong appetite for tax-exempt securities despite elevated supply levels. Investment-grade corporate bonds outperformed Treasuries for the week, though regional bank credits notably underperformed on Thursday following fraud-related loan disclosures that heightened sector-specific credit concerns, while the high yield bond market showed selective participation as investors balanced attractive yields against emerging credit risks, particularly in sectors exposed to consumer lending and automotive supply chains where recent bankruptcies highlighted deteriorating fundamentals.
INCOME BUILDING
I-Bonds Set for Modest Bump: 4.02% Rate Expected for November
The U.S. Series I Savings Bond is poised for a small increase, with projections pointing to a 4.02% composite rate for bonds purchased between November 2025 and April 2026. While the uptick is modest, just four basis points higher than the current 3.98% rate, the underlying dynamics tell a more nuanced story for savers weighing their options.
Breaking Down the Numbers
The projected 4.02% rate comprises two components:
Variable rate: 3.12% (confirmed, based on September inflation data)
Fixed rate: 0.90% (estimated, down from the current 1.10%)
This structure matters significantly for long-term holders. The variable portion adjusts every six months based on inflation, while the fixed rate locks in permanently for the life of the bond up to 30 years.
The October Advantage
Here's where timing becomes critical. Despite the slightly higher composite rate coming in November, financial experts suggest October may offer the better deal. Purchasing before October 28 secures the current 1.10% fixed rate, which represents a meaningful 20-basis-point advantage that compounds over time.
An October purchase would yield:
3.98% for the first six months (through April 2026)
4.23% for the following six months (May-October 2026)
That superior fixed rate protecting against future low-inflation periods
The Inflation Picture
The new variable rate stems from the September inflation report, which showed the Consumer Price Index rising 0.3% for the month, bringing annual inflation to 3.0%—up from 2.9% the previous month. While economists had expected higher numbers, the 3% annual rate remains stubbornly above the Federal Reserve's 2% target.
This gradual inflation creep, from 2.3% in April to 3.0% in September, reflects ongoing pressure from tariff-related costs, particularly in categories like apparel and food. Yet the Fed appears increasingly focused on employment concerns, with additional rate cuts anticipated despite rising inflation.
Who Should Buy?
I-Bonds occupy a specific niche in the savings landscape. They're not competing with high-yield savings accounts on pure returns, but they offer something those accounts can't match: guaranteed inflation protection plus a locked-in real return via the fixed rate, all with state tax exemption.
The bonds make sense for:
Long-term holders who value the permanent fixed rate component
Education savers who can potentially exclude interest from federal taxes
Tax-deferred strategists who want to postpone interest taxation until redemption
They're less compelling for:
Short-term savers facing the three-month interest penalty for withdrawals before five years
Liquidity seekers who need immediate access (I-Bonds lock up funds for one year minimum)
Large investors constrained by the $10,000 annual purchase limit per person
Historical Context
The 4.02% projection continues a period of relative normalcy after the extraordinary rates of 2021-2022, when inflation surged post-pandemic. The 9.62% rate in mid-2022 feels like ancient history now, yet it illustrated I-Bonds' core value proposition: automatic adjustment to whatever inflation brings.
For perspective, bonds purchased during that frenzy carried a 0% fixed rate, meaning their current six-month rate is just 3.12%—the bare variable component. Those October 2025 purchases with a 1.10% fixed rate will consistently outperform them going forward, regardless of future inflation.
The Bottom Line
At 4.02%, I-Bonds aren't breaking any excitement meters. Money market funds currently offer similar or better yields with greater liquidity. But for investors thinking in years rather than months, locking in a 1.10% real return above inflation (if purchasing in October) remains an attractive proposition in an uncertain economic environment.
The decision ultimately hinges on your timeline and what you believe about future inflation and interest rates. If you think we're entering a prolonged period of low inflation, today's fixed rates may look generous in hindsight. If inflation continues climbing, that variable component provides protection. Either way, the October 28 deadline looms for those seeking that higher fixed rate—a decision that becomes permanent once made.
INCOME BUILDING
Cash Rates
Government Money Market Funds (7-Day Yields)
SNVXX (Schwab Government Money Fund - Investor Shares): 3.87%
SPAXX (Fidelity Government Money Market Fund): 3.80%
TTTXX (BlackRock Liquidity Funds: Treasury Trust - Institutional Class): 3.90%
VMFXX (Federal Money Market Fund): 4.04%
Brokered CD Rates (6-Month Rate)
Charles Schwab: 3.79%
E*Trade: 3.80%
Fidelity: 3.75%
Merrill Edge and Merrill Lynch: —
Vanguard: 3.80%
ETFs (30-Day Yields)
SGOV (iShares 0-3 Month Treasury Bond ETF): 4.00%
BIL (SPDR Bloomberg 1-3 Month T-Bill ETF): 3.92%
USFR (WisdomTree Floating Rate Treasury Fund): 3.94%
TFLO (iShares Treasury Floating Rate Bond ETF): 3.96%
DEALS AND BONUSES
OKX Crypto: $500 Total Bonus via $200 Referral + 10% Deposit Match
OKX is offering new customers a stackable dual promotion totaling up to $500: a $200 crypto bonus plus a 10% deposit match on USDG stablecoin (up to $300 on $3,000 deposit). The deposit match effectively delivers a 10% return in 90 days on a dollar-pegged stablecoin, allowing conservative users to avoid crypto price volatility while still capturing the bonus structure by using the same deposit to satisfy both promotions.
Offer Details
$200 New Customer Bonus:
Primary benefit: $200 in crypto after meeting deposit and trading requirements
Sign-up requirement: Must register via a referral link (promo code: 33664110)
Identity verification: Driver's license and smartphone selfie required
Deposit threshold: $200+ in cash (via Plaid-linked bank) or crypto within 30 days
Trading requirement: Buy and hold $200+ in crypto (including stablecoins like USDG) for 30 days within 90-day window
Bonus unlock: Tradable and withdrawable after 90 days
Offer expiration: October 31, 2025 at 6:00 PM
10% USDG Deposit Match (does not require referral link):
Match structure: 10% bonus on every 500 USDG increment deposited and held for 90 days. Details here.
Maximum reward: 300 USDG ($300) on 3,000 USDG ($3,000) deposit
Tracking: Multiple deposits allowed; system tracks and aggregates automatically
Reward timing: Up to 5 minutes for rewards to reflect
Holding requirement: 90 days before rewards become tradable/withdrawable
Double-dip strategy: Opt into deposit match before depositing, then use same funds to purchase USDG and satisfy both promotions simultaneously
Our Thoughts
This promotion delivers a 10% return in 90 days through the USDG deposit match, with USDG being a stablecoin pegged 1:1 to the US dollar to avoid cryptocurrency price volatility. The optimal approach is to stack both offers by purchasing $3,000 in USDG, which satisfies the $200 bonus requirements while simultaneously earning the full $300 deposit match for a combined $500 total bonus. Please perform your own due diligence on crypto platforms You should assess your own comfort level with the 90-day holding period. For context, OKX is profiled in Forbes' article "The World's Most Trustworthy Crypto Exchanges", though this shouldn't replace your own research. For those comfortable with the risk/reward ratio, this represents one of the more lucrative bonus structures currently available among any fintech or crypto apps.
Picture of the Week
