I-bonds do look great right now, but I agree with CnC: given their limits (and the fact that if the Fed is successful, inflation should start declining soon), is it reallly better than an S&P idx fund over any reasonable length of time?
NPR ran a story earlier this month on someone who has been bullish on I-bonds since their inception. Some relevant quotes (my bolded):
WONG: Zvi Bodie is a professor emeritus at Boston University. He's a financial economist who has been obsessed with inflation hedging strategy since the 1970s. And he sees I bonds as a government program that serves the public interest. Basically, the U.S. Treasury is covering the cost of inflation for regular folks. So the U.S. Treasury introduced I bonds in 1998. And that year, Zvi goes to a bank to buy the maximum amount of I bonds for him, his wife and their two daughters...
No. 1, I bonds protect you from inflation. They don't beat inflation. And No. 2, you're not going to get rich quick off I bonds. There's this $10,000 cap or calendar year, and the earliest you can redeem an I bond is one year. But for Zvi, it's been worth it. He estimates he has more than half a million dollars of I bonds in his portfolio today.
So if Bodie put in the max $10k every year he could (not sure he has)...and only for himself (story seems to imply he invests for his wife and kids, too)...then his principle over the past 24 years is $240k. If he is sitting on more than $500k, then that's not an amazing roi over 24 years (somewhere b/w 3-4%, and possibly less if he's adding in his wife and kids' accounts, too)
In short, this is my reaction when I think about going into I-bonds for just a year or two:
https://youtu.be/07ul6FkLbAE?t=170
(The story is unclear how much Bodie puts in every year, so I could be very wrong on his roi...but he's probably sleeping well at night right now!)