Transcript of Inflation Is at 3.8%. Are Are Three Ways to Make Your Money Fight Back.

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I'm Nicole Latfin, the only financial expert you don't need a dictionary to understand. It's time for some money reading. Last week we talked about how hard it is to be the Fed right now. The Fed is in charge with keeping inflation in check, but inflation is not behaving right now. The data on inflation shows that it's at 3.8% right now, but we did not need that data or that report because we have all been feeling it already. You cannot turn on the news or scroll Instagram without hearing about it. But yeah, I'm also going to bring it up too. Gas prices. Gas is averaging $4.50 a gallon nationwide right now, and that is up from just under $3 a few months ago. Where I'm at in LA, I just passed a gas station that was $6.04, and I did like a jump scare. The point is inflation is back, and if you're not actively protecting your savings from it, your money is getting eaten alive. But there is good news here. There are places you can put your money that will help you fight back against inflation. But you know what? I'm going to start with the bad news first.

I can't help it. You can take the girl out of CNN, but you can't take CNN out of the girl. So here's the bad news. The government's main inflation report is the Consumer Price Index, or CPI. That latest report is what told us that inflation hit 3.8% for the 12 months ending April of 2026. That is the highest reading it has been since May of 2023, and it accelerated fast. We were at 2.4% as recently as February of this year. In just 2 months, inflation jumped a full percentage point. So here is what's driving it. Energy prices surging nearly 18% year over year in April alone. Gasoline up 28%. Fuel oil is up 54%. Now we know why this is happening. The conflict in Iran has disrupted oil exports through the Strait of Hormuz, which is one of the most critical choke points for global oil supply. But it is not just gas. It is eggs. It's burgers. It's electricity. The BLS confirms what our receipts already told us.

Food at home is up 0.7% in April.

Alone. Beef is up 2.7% in a single month. I mean, if you're barbecuing this Fourth of July, your grocery bill is going to be no joke. But even if the war were to end today, it's not like it's going to come down right away. It will take a beat for prices to come down. But meanwhile, we're out here dealing with 3.8% inflation right now. A 3.8% inflation rate means that $100 you had in January is only worth about $96.30 right now. All right, whooza! Here's the good news. There are ways to protect your money for the long haul. And I'm going to start with a personal favorite of mine, I bonds. I bonds are savings bonds issued by the US Treasury, and they do something that no other safe investment does. The interest rate automatically adjusts every 6 months based on inflation. So when inflation goes up, your rate goes up. It is literally designed for the environment we're living in right now. It's dope.

Seriously.

You never thought I'd say that about a bond, but it is in fact dope. The current rate on I bonds is 4.26%, and it's going to stay that way until the next adjustment at the end of October. That includes a fixed rate of 0.9%, which is locked in for the life of the bond, plus an inflation component of 3.36% that resets every 6 months. Here's an important part to know. That 0.9% fixed rate is your floor. So even if inflation eventually drops to 0%, you're still earning something. 0.9% is not a lot. I get that. But this isn't about growth strategy here. It's about preservation strategy. You can buy up to $10,000 in I bonds per person per calendar year. Couples can do $20,000. You have to hold them for at least 1 year before redeeming. You If you redeem though before 5 years, you lose the last 3 months of interest, which is a small penalty to pay. After 5 years, they are completely liquid, zero penalty. So with that in mind, I bonds are best for money that you're not going to need for at least a year, part of your emergency fund or long-term savings.

They're not for money that you need tomorrow. Now, there's sadly only one way to buy them. Through TreasuryDirect.gov. Go to the site, open an account, link your bank account. You can click Buy Direct. Fair warning here, this site looks like it was designed in 2004 because it basically was. It is clunky as heck. The last time I logged on, I used this virtual keyboard where you have to click each character individually. But it works at the end of the day. It's honestly worth the 15 minutes of frustration for the inflation protection that you're going to get on the other side. Just wanted to give you that caveat though. Next up, TIPS. TIPS stands for Treasury Inflation Protected Securities. This is a more sophisticated cousin of I bonds. TIPS work in a way that actually makes it more powerful for long-term investing. I'm going to explain this at a high level, and it's going to sound maybe a little bit confusing, but then I'm going to give you an example, and I think it will actually click. TIPS have a fixed interest rate like a regular bond, but instead of that rate being applied to a fixed principal.

It's applied to a principal that adjusts with inflation every single day. So if inflation rises, your principal goes up. And since your interest payments are calculated based on that adjusted principal, your interest payments will go up if your adjusted principal goes up too. When that bond matures, you get the inflation-adjusted principal back or your original investment, whichever is higher. So deflation is not going to hurt you, but that's an episode for a different day. I know this might sound complicated, but here's an example hopefully to clear it up. If you buy $1,000 in TIPS and the interest rate is 1%, you get $10 in interest payments. If inflation stays the same, nothing happened. But this is the really good part. When inflation goes up, let's say it goes up 5%, your bond is then worth $1,050, and then your payment goes up as well to $10.50 instead of just $10. I know the 50 cents doesn't sound like a lot, But if you own more tips and inflation gets insane, then that is real money. Right now, 10-year tips recently auctioned with a real yield of a little over 2% above inflation. So that means over the life of the bond, you're earning 2% on top of whatever inflation does.

So if inflation continues to be 4% for the next decade, your total return would be roughly 6%. That is meaningful long-term money. TIPS come in 5, 10, and 30-year maturities. If you don't want to manage individual bonds, I totally get that. You can buy a TIPS fund through an ETF like Vanguard's VIPSX or iShares TIP, which gives you diversified exposure to TIPS across different maturities. One other thing to know here: TIPS are way better for long-term money than short-term savings because their principal fluctuates with inflation. If you need to sell before maturity, you have to deal with market pricing. And in a rising real interest rate environment, that can mean a loss on paper. So hold them to maturity and you're protected. Trade them in the middle and you're exposed to normal bond market risk. Charles Schwab published an analysis noting that right now, while most TIPS yields are positive, very short-term TIPS did briefly turn negative after the Iran war began in February. So again, these are designed to be long-term inflation hedges. Mm-hmm. Not short-term cash substitutes. So just remember that. Now, last but certainly not least, gold. The relationship between gold and inflation is real, but not exactly simple.

So this is the least direct option to hedge against inflation. You have been warned. With that said, over long time horizons, gold is a reliable store of value. From January of 2016 to January of 2022, '96, gold returned over 300%. US inflation over that same decade totaled 33%. So gold didn't just keep pace with inflation, it absolutely smoked it. At the time I'm recording this, gold is trading at around $4,400 per ounce, which is up $1,000 from a year ago. The all-time high was $5,600 per ounce, which it hit in January of this year. Gold rises when uncertainty is high and when confidence in institutions is low. It is called the flight to safety asset. Right now we have a war in the Middle East. We have persistent inflation, a Federal Reserve that cannot stop fighting within itself. Global central banks buying up gold at a significant pace. JP Morgan forecasting gold pushing toward $5,000 an ounce by Q4. All of these things create a very favorable environment for gold right now. But gold does not always rise in lockstep with inflation. Gold is not an I-bond, which is designed to do that. During the inflation surge during the pandemic, a lot of people bought gold expecting it to immediately skyrocket as CPI climbed, but it didn't, at least not right away.

That's because of this exact flight to safety idea. Gold tends to rise when the real return on safe alternatives like bonds is low or negative. So when the Fed was aggressively hiking rates in 2022, and yields went up, gold actually traded sideways despite inflation. In 2026, with the Fed on hold and real rates under pressure, gold is much better positioned. Gold really thrives when the economy is basically a dumpster fire. When everything is going wrong all at once— currency debasement, institutional collapse, geopolitical shock— in this environment, gold really shines. No pun intended. Maybe a little. So I'd say gold is less an inflation protection move and more of a wealth preservation move. Sometimes those two things are the exact same thing, and sometimes they're a little different. To invest in gold, you can buy the physical asset, but that's kind of an unhinged move. I would not recommend it. There are much easier ways to do that, and I have talked about this on the show before. I've linked that episode in the show notes. All right, so let me put a full bow on this, a beautiful, beautiful gold bow. Today I covered 3 tools: I bonds for medium-term savings that need automatic inflation protection, earning 4.26% today with the rate adjusting as inflation moves.

We talked about TIPS for long-term money where you want real return above inflation baked in structurally. And we've talked about gold for long-term wealth preservation as insurance against currency debasement and the kind of compounding inflation that makes $100 feel like $60 a decade from now. These are not the sexiest investments. I know that I bonds are not going to make you a millionaire. But while everyone else is watching their savings account yield 0.5% while inflation runs at 3.8%, you could be staying even or better. And you know what? In the wealth building game over time, not losing ground is sometimes the most under-rated move you can make. For today's tip you can take straight to the bank, if you're buying I bonds, consider what's called a gift box strategy to effectively double your annual purchase limit. Here's basically how it works. You can purchase I bonds as a gift for your spouse or vice versa and hold them in a TreasuryDirect gift box without actually delivering them until the following calendar year. That means in one calendar year, you and your partner can each buy $10,000 in I bonds for yourself plus buy a $10,000 gift bond for the other person, potentially stacking $40,000 in I bond purchases in a single 12-month window.

The gift bonds earn interest from the moment they're purchased, even while they're just sitting there in that gift box waiting to be delivered to the other person.

But you know what?

This is one of the few legal government-sanctioned ways to stretch that I bond purchase limit.