Every investing rule carries an assumption about inflation, whether explicitly stated or not. Most of the rules working Americans follow were written when that assumption cost nothing, because inflation sat near 2% and nobody had to price it.
This year, it costs something. Regular gasoline averaged $4.465 a gallon in the week ending Sept. 28, up $1.347 from a year earlier, according to the Energy Information Administration.
Consumer confidence just fell to its weakest reading since 2014. That puts a hole in one of the most repeated rules in personal finance, and the hole is worth more than a percentage point.
Dave Ramsey tells investors to skip bonds
Personal finance expert Dave Ramsey offers guidance on the Ramsey Solutions webpage.
“We don’t recommend betting your retirement on bonds. You’re better off investing your money in a mix of growth stock mutual funds,” reads the page explaining bonds, published in November 2021 and last updated in September 2023.
The page gives two reasons. Bonds “barely outpace inflation,” and if “interest rates are low and inflation increases, inflation could outpace the return.”
Related: Dave Ramsey has surprising advice for homebuyers
The guidance also carries two links to SmartVestor Pro, the advisor-referral network Ramsey Solutions discloses it promotes for a fee, which is worth knowing when a rule steers you out of an asset class.
His broader philosophy, last updated on his site in April 2026, puts 15% of income into four types of growth stock mutual funds and assumes stocks return 10% to 12% a year.
On the median household income of $87,460, that 15% works out to $13,119 a year, or $1,093.25 a month. TheStreet has examined the 8% withdrawal rate he pairs with those returns.
Why one Treasury breaks Ramsey’s bonds rule
The Treasury sells two kinds of notes. One pays a fixed number, and the other pays a fixed number on top of whatever inflation turns out to be, because its principal moves with the consumer price index.
Ramsey’s page does not separate them, and the difference is the whole story. On Sept. 28, the 10-year Treasury note yielded 5.24%, while the 10-year inflation-linked note yielded 2.90% above inflation, according to the Treasury Department‘s own daily yield curves.
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Subtract one from the other, and you get the inflation rate the bond market is pricing over the next decade, which is 2.34%.
That 2.90% real yield stood at 2.44% on Aug. 31, so it climbed 46 basis points in four weeks.
A $19 billion reopening on Sept. 17 cleared at a 2.653% real yield, the highest for that term since October 2008, TipsWatch publisher David Enna reported that day. TheStreet covered real yields climbing past 2% in July, and they have gone higher since.
Households and the market disagree sharply
Consumers put 12-month inflation at 6.1% on average and 5.1% at the median in September, both up three tenths of a point, the Conference Board reported Sept. 29.
Its Consumer Confidence Index fell 6.7 points to 81.9, against a consensus near 89.2. The Expectations Index dropped to 63.6, a third straight monthly decline and well under the 80 level that has historically flagged recession risk.
“References to prices, the high cost of goods and services, and oil and gas prices in particular, rose to new heights, reflecting September’s surge in fuel costs,” said Dana Peterson, chief economist at The Conference Board.
Take the household number at face value, and the arithmetic turns hostile quickly. A 10-year Treasury at 5.24% loses 0.81% a year in purchasing power at 6.1% inflation, so $10,000 comes back worth $9,218 in today’s money.
The inflation-linked note earns 2.90% above inflation whatever inflation does, turning that same $10,000 into $13,309 in today’s money. The spread is $4,091 on a single $10,000 decision.
At a glance
- 10-year Treasury note, Sept. 28: 5.24%
- 10-year inflation-linked note, Sept. 28: 2.90% above inflation
- Implied 10-year inflation rate: 2.34%
- Consumer 12-month inflation expectation: 6.1% average, 5.1% median
- Consumer Confidence Index, September: 81.9, down from 88.6
- Expectations Index, September: 63.6
- Regular gasoline, week ending Sept. 28: $4.465 a gallon
- Top national savings rate: 4.20% APY against a 0.65% average
- Sources: Treasury Department daily yield curves; The Conference Board; Energy Information Administration; Bankrate. The implied inflation rate is TheStreet’s calculation.
The number that squeezes Ramsey’s case
Run the comparison the way an investor actually faces it. A 2.90% real yield is worth the same as a 9.18% nominal return if inflation runs at the 6.1% households expect.
Ramsey’s own page claims stocks return 10% to 12%. At the top of the household expectation, his advantage over a government note carrying no market risk narrows to 0.82 percentage points.
At the Fed’s own projection of 3.4% core inflation for 2026, that same 2.90% real yield is worth only 6.40% nominal, and his advantage widens back to between 3.60 and 5.60 points.
The distance between those two outcomes is the entire argument, and it turns on an inflation number nobody has yet.
Why households may be wrong anyway
Consumers have badly overshot before. Their inflation expectations were more unanchored in early 2025 than at the late 1970s peak, once you account for how widely their forecasts disagreed.
That finding comes from Robert Rich and Alexander Cline of the Cleveland Fed‘s Center for Inflation Research, in work published Feb. 2. One-year-ahead expectations peaked above 9%.
The same bank reported in March that anchoring “deteriorated notably for consumers in 2025,” while professional forecasters showed no such weakening. So 6.1% reads as a fear number more than a forecast.
Inflation is still doing real damage at far lower rates. Real home values fell for a 14th consecutive month in July, even as nominal prices rose 1.9%, according to the S&P Cotality Case-Shiller index released Sept. 29.
What it means for you
Inflation-linked notes sell in $100 multiples in 5-, 10-, and 30-year terms, and at maturity, you collect the greater of your original or inflation-adjusted principal, according to NerdWallet.
Hold them inside a 401(k) or IRA where you can. The inflation adjustment counts as federal taxable income in the year it accrues, even though no cash reaches you. It does, however, escape state and local tax.
Ramsey’s 15% savings rate holds up, and so does his warning about concentrating in single stocks. The line to check is the one treating every government bond as the same instrument.
If you already follow his allocation, the useful question is whether the fixed-income slice you were told to skip now pays enough to fund a few years of retirement spending without market risk attached. His stance on holding stocks deep into retirement makes that question sharper, not softer.
The next reading of household inflation expectations lands Oct. 27, and the Fed meets before that. Both will move the number this decision turns on.
Related: Dave Ramsey warns Americans on 401(k)s, Roth 401(k)s
