[Code of Federal Regulations] [Title 31, Volume 2] [Revised as of July 1, 2006] From the U.S. Government Printing Office via GPO Access [CITE: 31CFR359.12] [Page 445] TITLE 31--MONEY AND FINANCE: TREASURY CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY PART 359_OFFERING OF UNITED STATES SAVINGS BONDS, SERIES I--Table of Contents Subpart A_General Information Sec. 359.12 What happens in deflationary conditions? In certain deflationary situations, the semiannual inflation rate may be negative. Negative semiannual inflation rates will be used in the same way as positive semiannual inflation rates. However, if the semiannual inflation rate is negative to the extent that it completely offsets the fixed rate of return, the redemption value of a Series I bond for any particular month will not be less than the value for the preceding month.