Correlations between the various CPIs are around 0.99.
No, it isn't irrelevant. We are in a thread about a mathematical model. If Ben changed TIPS from being assumed risk-free zero-volatility of spending and instead reflected, as a starting point, the difference between CPI-U and CPI-E, the model would give different answers than it does today and retirees who follow this model's advice would construct different plans.
It might make sense for retirees to plan for a little more inflation in healthcare etc. than what TIPS cover, but any effects here are going to be dwarfed by other assumptions / unknowns.
But even more importantly a nominal yield has no correlation at all with your “personal inflation rate”
Statistics: Posted by ScubaHogg — Sat Dec 07, 2024 6:39 am