State the current rate on the 10-Year US Treasury Bond (for the most recently stated observation)

[Note: this is an annual rate]

State the percentage increase in the Consumer Price Index over the last 12 months (before seasonal adjustment).

d.) If the inflation rate over the next 12 months turns out to be the same as your answer in part c.) above, what will be the real rate of return on the 10-year U.S. Treasury.

FRED 10-Year Treasury Constant Maturity Rate 4.0 3.5 3.0 25 Percent 2.0 M 15 1.0 0.5 2012 2014 2016 2018 2020 = 1980 ____ Consumer Price Index Summary Transmission of material in this release is embargoed until 8:30 a.m. (ET) September 11, 2020 USDL-20-1693 Technical information: (202) 691-7000 @ cpi_info@bls.gov @ www.bls.gov/cpi Media Contact: (202) 691-5902 PressOffice@bls.gov CONSUMER PRICE INDEX AUGUST 2020 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in August on a seasonally adjusted basis after rising 0.6 percent in July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.3 percent before seasonal adjustment. The monthly increase in the seasonally adjusted all items index was broad-based; a sharp rise in the used cars and trucks index was the largest factor, but the indexes for gasoline, shelter, recreation, and household furnishings and operations also contributed. The energy index rose 0.9 percent in August as the gasoline index rose 2.0 percent. The food index rose 0.1 percent in August after falling in July; an increase in the food away from home index more than offset a slight decline in the food at home index. The index for all items less food and energy rose 0.4 percent in August after increasing 0.6 percent in July. The sharp rise in the index for used cars and trucks accounted for over 40 percent of the increase; the indexes for shelter, recreation, household furnishings and operations, apparel, motor vehicle insurance, and airline fares also rose. The indexes for education and personal care were among the few to decline. The all items index increased 1.3 percent for the 12 months ending August; this figure has been rising since the period ending May 2020, when the 12-month increase was 0.1 percent. The index for all items less food and energy increased 1.7 percent over the last 12 months. The food index increased 4.1 percent over the last 12 months, with the index for food at home rising 4.6 percent. Despite recent monthly increases, the energy index fell 9.0 percent over the last 12 months. Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city average Seasonally adjusted changes from preceding month Un- adjusted 12-mos. Feb. Mar. Apr. May June July Aug. ended 2020 2020 2020 2020 2020 2020 2020 Aug. 2020 .1 -.4 -.8 .4 .3 1.5 .5 .5 2.6 .2 .2 .1 -2.0 -5.8 -10.1 -3.5 -10.4 -20.0 -3.4 -10.5 -20.6 -8.5 -13.7 -15.6 -.3 -.5 .1 -.1 -.2 .1 .4 .1 -.1 .3 .9 -.1 .7 1.0 .4 -1.8 -3.5 -3.5 -6.3 -.5 -.8 .6 .6 .7 .5 5.1 11.7 12.3 10.2 -.2 -.3 .6 -.4 -1.1 .5 2.5 5.3 5.6 4.3 1.3 4.1 4.6 3.5 -9.0 -16.7 -16.8 -23.6 -.1 -.1 2.0 2.0 3.9 -. -.2 .3 -.9 -1.4 .2 .8 .0 -1.0 -.2 -.5 All items. Food... Food at home. Food away from home (1).. Energy... Energy commodities.. Gasoline (all types). Fuel oil... Energy services... Electricity... Utility (piped) gas service.. All items less food and energy... Commodities less food and energy commodities.... New vehicles.. Used cars and trucks.... Apparel.... Medical care commodities Services less energy services... Shelter..... Transportation services Medical care services... .2 -.1 -.4 -.1 .2 .6 .4 1.7 .2 .1 .4 .4 -.6 -.3 -.7 -.4 .8 -.4 -2.0 -4.7 -.1 -.2 .3 -.4 -2.3 .1 -1.2 1.7 .2 .7 .8 2.3 1.1 .0 1.0 .0 5.4 .6 -.1 .4 .7 4.0 -5.9 .8 .0 -.4 .2 .1 .0 .2 -3.6 .6 .3 .3 .3 .3 .1 2.1 .5 .6 .2 3.6 .5 2.2. 2.3 -4.0 -1.9 -4.7 .5 .5 .1 5.3 1 Not seasonally adjusted. FRED 10-Year Treasury Constant Maturity Rate 4.0 3.5 3.0 25 Percent 2.0 M 15 1.0 0.5 2012 2014 2016 2018 2020 = 1980 ____ Consumer Price Index Summary Transmission of material in this release is embargoed until 8:30 a.m. (ET) September 11, 2020 USDL-20-1693 Technical information: (202) 691-7000 @ cpi_info@bls.gov @ www.bls.gov/cpi Media Contact: (202) 691-5902 PressOffice@bls.gov CONSUMER PRICE INDEX AUGUST 2020 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in August on a seasonally adjusted basis after rising 0.6 percent in July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.3 percent before seasonal adjustment. The monthly increase in the seasonally adjusted all items index was broad-based; a sharp rise in the used cars and trucks index was the largest factor, but the indexes for gasoline, shelter, recreation, and household furnishings and operations also contributed. The energy index rose 0.9 percent in August as the gasoline index rose 2.0 percent. The food index rose 0.1 percent in August after falling in July; an increase in the food away from home index more than offset a slight decline in the food at home index. The index for all items less food and energy rose 0.4 percent in August after increasing 0.6 percent in July. The sharp rise in the index for used cars and trucks accounted for over 40 percent of the increase; the indexes for shelter, recreation, household furnishings and operations, apparel, motor vehicle insurance, and airline fares also rose. The indexes for education and personal care were among the few to decline. The all items index increased 1.3 percent for the 12 months ending August; this figure has been rising since the period ending May 2020, when the 12-month increase was 0.1 percent. The index for all items less food and energy increased 1.7 percent over the last 12 months. The food index increased 4.1 percent over the last 12 months, with the index for food at home rising 4.6 percent. Despite recent monthly increases, the energy index fell 9.0 percent over the last 12 months. Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city average Seasonally adjusted changes from preceding month Un- adjusted 12-mos. Feb. Mar. Apr. May June July Aug. ended 2020 2020 2020 2020 2020 2020 2020 Aug. 2020 .1 -.4 -.8 .4 .3 1.5 .5 .5 2.6 .2 .2 .1 -2.0 -5.8 -10.1 -3.5 -10.4 -20.0 -3.4 -10.5 -20.6 -8.5 -13.7 -15.6 -.3 -.5 .1 -.1 -.2 .1 .4 .1 -.1 .3 .9 -.1 .7 1.0 .4 -1.8 -3.5 -3.5 -6.3 -.5 -.8 .6 .6 .7 .5 5.1 11.7 12.3 10.2 -.2 -.3 .6 -.4 -1.1 .5 2.5 5.3 5.6 4.3 1.3 4.1 4.6 3.5 -9.0 -16.7 -16.8 -23.6 -.1 -.1 2.0 2.0 3.9 -. -.2 .3 -.9 -1.4 .2 .8 .0 -1.0 -.2 -.5 All items. Food... Food at home. Food away from home (1).. Energy... Energy commodities.. Gasoline (all types). Fuel oil... Energy services... Electricity... Utility (piped) gas service.. All items less food and energy... Commodities less food and energy commodities.... New vehicles.. Used cars and trucks.... Apparel.... Medical care commodities Services less energy services... Shelter..... Transportation services Medical care services... .2 -.1 -.4 -.1 .2 .6 .4 1.7 .2 .1 .4 .4 -.6 -.3 -.7 -.4 .8 -.4 -2.0 -4.7 -.1 -.2 .3 -.4 -2.3 .1 -1.2 1.7 .2 .7 .8 2.3 1.1 .0 1.0 .0 5.4 .6 -.1 .4 .7 4.0 -5.9 .8 .0 -.4 .2 .1 .0 .2 -3.6 .6 .3 .3 .3 .3 .1 2.1 .5 .6 .2 3.6 .5 2.2. 2.3 -4.0 -1.9 -4.7 .5 .5 .1 5.3 1 Not seasonally adjusted