Federal Reserve, the Economy and CD Rate Forecast - Oct 25, 2022

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With the next Fed meeting just a week away, it’s time for another Fed summary with a preview of what to expect. The two-day meeting is scheduled to start on Tuesday, November 1st with the statement released at 2:00pm EDT on Wednesday, November 2nd. At 2:30pm, Fed Chair Powell’s post-meeting press conference will take place. There will be no update to the Fed’s Summary of Economic Projections (SEP) at this meeting.

Expectations are high for another 75-bp rate hike. This would be the fourth straight 75-bp rate hike since June, and it would raise the target federal funds rate to 3.75%-4.00%.

According to this WSJ piece, at this November meeting, the Fed will be debating “whether and how to signal plans to approve a smaller increase in December.” One group at the Fed wants to slow the pace of the rate hikes and move to a pause in hopes that it’ll prevent a recession and that it’ll give time to evaluate the impacts of the higher rates. The other group worries more about inflation becoming entrenched and thinks it’s too soon to discuss slowing down the rate hikes.

If the inflation doves win, we’ll likely see rate hikes reduce to 50 bps at the December 13-14 meeting and 25 bps at the January 31-February 1 meeting before pausing. In this case, the terminal rate will be 4.50%-4.75%. If the inflation hawks win, we will likely see the terminal rate over 5%.

Of course, a lot will depend on how inflation evolves. High inflation has been surprising economists for more than a year now. If that continues, we should see the federal funds rate well into the 5% range next year.

Most of the Fed officials appear to agree that once inflation falls to the point that it allows rate hikes to come to an end, the Fed should pause for some time to ensure high inflation doesn’t return like it did in the 70s. We will likely see direct CD rates peak during this pause. This is the time that the lag between Treasury yields and direct CD yields will be useful for CD investors. We should see Treasury yields fall much faster than CD yields. You can see this in 2018 and 2019. The 5-year Treasury yield peaked in October 2018, while 5-year CDs didn’t peak until December. Treasury yields then went down much faster and deeper than the CD yields. Early 2019 proved to be a good time to lock into long-term CDs.

There is the possibility that rate cuts won’t come right after the pause. If the Fed makes the same mistake that it made in the 70s, they may be forced to hike rates again to bring down inflation. So that could make you regret locking into a long-term CD too early.

Treasury Yields

Treasury yields of all durations have had substantial increases in October. Treasury bills with durations of one year and under had the largest yield gains, with the 1-month and 3-month yields gaining the most. The 3-month yield is now over 4% (4.14%). The 6-month yield (4.50%) and 1-year yield (4.60%) are also up substantially from a month ago.

The longer-term Treasury notes had smaller gains. In the last month, the 2-, 5- and 10-year yields have gained 15 bps, 10 bps, 22 bps, respectively.

The large short-term yield gains combined with the moderate long-term yield gains have resulted in more yield curve inversion. The 3-month yield (4.14%) now exceeds the 10-year yield (4.10%). This negative yield spread doesn’t bode well for the economy. When this spread stays negative for some time, recessions have always followed. I mentioned this economy blog post from the Federal Reserve Bank of St. Louis in my last Fed summary, and I’m including it again since it explains well how the yield inversion can cause banks to cut back on lending which can contribute to a recession.

The large rise of Treasury bill (T-bill) yields does provide a good opportunity for savers to boost their cash yield. T-bills (durations of from three months to one year) do offer a significant yield advantage over short-term CDs. At the market close today, the 3-, 6- and 12-month T-bill yields were 4.14%, 4.50% and 4.60%, respectively. These are higher than any short-term direct CD rates with comparable maturities.

Treasury notes (durations from two to ten years) have yields that are closer to the yields of top direct CDs with similar maturities, but the T-note yields are still generally higher with the 2-, 3- and 5-year yields at 4.42%, 4.45% and 4.25%, respectively.

Savers who are considering buying T-bills and would like to learn how best to buy them, this TIPSWatch post offers many useful details on buying them at TreasuryDirect, and this The Finance Buff post offers many useful details on buying them from Fidelity, Vanguard or from Charles Schwab.

Odds of Fed Rate Hikes

The odds of a 75-bp rate hike at next week’s Fed meeting are very high (95.7%).

For the December meeting, the odds are very high (98.0%) that the target federal funds rate will be at least 125 bps higher than it is today (98.0%). That implies a 75-bp rate hike next week and a 50-bp rate hike in December. The odds that the target rate will be 150 bps higher in December are just over 50-50 (50.5%). That implies a 75-bp rate hike at both the November and December meetings.

For the January/February meeting, the odds are very high (98.7%) that the target rate will be 150 bps higher. The most likely rate hike path for this would be 75-bp, 50-bp and 25-bp which would raise the target rate to 4.50%-4.75%.

For later 2023 meetings, the odds max out in the low 80% that the target federal funds rate reaches 4.75%-5.00% (a gain of 175 bps). The odds of total gains of 200 bps or higher (which would raise the target rate to 5.00%-5.25% or higher) are all below 50-50.

The odds of 175-bp and 200-bp rate gains start declining in the later 2023 meetings which implies rising odds of rate cuts later in 2023.

These odds suggest a terminal target federal funds rate at 4.75%-5.00% (a gain of 175 bps from today’s target rate). A possible rate hike path for this would be 75-bp, 50-bp, 25-bp and 25-bp.

These federal funds rate odds are based on the CME FedWatch tool. The CME FedWatch tool lists implied probabilities of future target federal funds rate hikes based on the Fed Funds futures market.

The following numbers are based on Daily Treasury Yield Curve Rates and the CME Group FedWatch.

Treasury Yields (Close of 10/25/2022):

  • 1-month: 3.56%, up 83 bps from 2.73% 1 month ago (0.07% a year ago)
  • 3-month: 4.14%, up 75 bps from 3.39% 1 month ago (0.06% a year ago)
  • 6-month: 4.50%, up 55 bps from 3.95% 1 month ago (0.06% a year ago)
  • 1-year: 4.60%, up 43 bps from 4.17% 1 month ago (0.14% a year ago)
  • 2--year: 4.42%, up 15 bps from 4.27% 1 month ago (0.47% a year ago)
  • 5--year: 4.25%, up 10 bps from 4.15% 1 month ago (1.19% a year ago)
  • 10-year: 4.10%, up 22 bps from 3.88% 1 month ago (1.64% a year ago)
  • 30-year: 4.26%, up 54 bps from 3.72% 1 month ago (2.09% a year ago)

Fed funds futures' probabilities of future rate changes by (@ 4:00pm EDT 10/25/2022)

Nov 2, 2022 - up by at least:

  • 50 bps: 100.0%, same as last week
  • 75 bps: 95.7%, down from 95.9% last week

Dec 14, 2022 - up by at least:

  • 100 bps: 100.0%, same as last week
  • 125 bps: 98.0%, down from 98.7% last week
  • 150 bps: 50.5%, down from 64.3% last week

Feb 1, 2023 - up by at least:

  • 125 bps: 100.0%, same as last week
  • 150 bps: 98.7%, down from 99.1% last week
  • 175 bps: 67.9%, down from 75.9% last week
  • 200 bps: 18.5%, down from 21.6% last week

Mar 22, 2023 - up by at least:

  • 150 bps: 99.1%, down from 99.4% last week
  • 175 bps: 81.3%, down from 83.4% last week
  • 200 bps: 40.1%, up from 39.2% last week
  • 225 bps: 8.1%, up from 7.0% last week

May 3, 2023 - up by at least:

  • 150 bps: 99.0%, up from 98.3% last week
  • 175 bps: 82.5%, up from 80.2% last week
  • 200 bps: 43.1%, up from 36.9% last week
  • 225 bps: 10.4%, up from 6.5% last week

Jun 14, 2023 - up by at least:

  • 150 bps: 97.7%, up from 96.1% last week
  • 175 bps: 78.8%, up from 75.0% last week
  • 200 bps: 39.9%, up from 33.2% last week
  • 225 bps: 9.5%, up from 5.75% last week

Dec 13, 2023 - up by at least:

  • 100 bps: 96.8%, up from 95.8% last week
  • 125 bps: 86.0%, up from 83.9% last week
  • 150 bps: 62.9%, up from 59.8% last week
  • 175 bps: 33.3%, up from 30.1% last week
  • 200 bps: 11.0%, up from 8.9% last week
  • 225 bps: 1.8%, up from 1.1% last week

Deposit Rate Changes and Forecasts

CD Rates

In the last month, CD rates have increased substantially, but the top direct CD rates generally lag Treasury yields of similar maturities. However, there are top long-term CDs with maturities of 3- and 5-years that have higher yields. I expect the top direct CDs to eventually catch up and over take Treasury yields for all maturities.

The major online banks have generally not been the direct CD rate leaders, and you can see that in the average online 1-year and 5-year yields. Nevertheless, their rates continue to rise with the 1-year rates having much larger gains than the 5-year rates.

In September, the average online 5-year CD yield increased 12.2 bps (to 3.272%) while the average online 1-year CD yield increased 48.2 bps (to 3.150%).

These October 1st online CD yield averages are now at their highest levels since I began tracking the online averages in 2017. For CDs at least, we’ve exceeded the peak rates that we saw in late 2018 and early 2019 when the target federal funds rate peaked at 2.25%-2.50% (75 bps below today’s level).

These averages are based on the 5-year Online CD Index and 1-year Online CD Index which are the average yields of ten online CD accounts from well-established online banks.

Instead of reviewing the rate increases of all the individual CDs, I decided to review how the top direct CD rates have increased since my last Fed summary in mid September. I compared CDs with terms from one to five years at both banks and credit unions.

Change in Top Direct CD APYs Since September 14

  • 5-year at banks: 3.65% → 4.25%
  • 5-year at CUs: 3.64% → 4.58%
  • 4-year at banks: 3.60% → 4.15%
  • 4-year at CUs: 3.85% → 4.47%
  • 3-year at banks: 3.55% → 4.10%
  • 3-year at CUs: 3.50% → 4.50%
  • 2-year at banks: 3.50% → 4.24%
  • 2-year at CUs: 3.59% → 4.27%
  • 1-year at banks: 3.30% → 4.03%
  • 1-year at CUs: 3.21% → 4.00%

I’ll have more discussion of the rate changes in my CD rate summary on Wednesday.

Savings, Checking and Money Market Rates

When interest rates are rising, online savings account rates tend to be near the target federal funds rate. This year, online savings accounts have been lagging more than in the past. I think the speed of the Fed’s rate hikes explains some of this lag. As the Fed’s rate hikes start to slow, we may see more of the major online savings accounts with rates near the bottom of the target federal funds range and the top online savings accounts with rates near the top of the target range.

We already have one online money market account with a yield equal to the top range (3.25%). That’s at Northern Bank Direct. Several online banks now have online savings account yields between 3% and 3.25%, and we have a major online bank with a 3.00% APY (CIT Bank Savings Connect). However, most of the major online banks still have their online savings account yields under 2.50%.

In September, the Online Savings Account Index increased 31 bps to 2.12%. That’s 11 bps under the Index peak in 2019 (2.23%). When I update the Index at the start of November, I anticipate that the Index will finally surpass the 2019 peak. This index tracks the average rate of ten well-established online savings accounts.

As I did with CD rate changes, I decided not to review all the savings account rate changes in the last month. Instead I’ll just review how the top rate for online savings accounts has changed. In addition, I included the yield changes of three major online banks.

Changes in Online Savings Account APYs Since September 14

  • Top OSA: 3.00% (DollarSavingsDirect) → 3.25% (Northern Bank Direct)
  • Synchrony OSA: 2.15% → 2.45%
  • Ally Bank OSA: 2.00% → 2.35%
  • Marcus OSA: 1.90% → 2.35%

Economic and Deposit Rate Scenarios for 2022 and 2023

For a review of the Fed’s latest Summary of Economic Projections and how that might impact deposit rates, please see my review of the September Fed meeting. I’ll be publishing a review of the November Fed meeting on Wednesday, November 2nd in the late afternoon.

Comments

Please keep comments focused on the Fed and the economy. Politics can impact the economy, but please try to minimize political discussion. If you must include some politics in your comments, please avoid attacking or disparaging commenters or politicians. Treat everyone with respect. The intent is to maintain a friendly and helpful community. Comments that are helpful, respectful and insightful are very much appreciated!


Comments
LovinSomeCDs
  |     |   Comment #1
Back in 2010-2012, I remember locking in 5 year CDs for less than 2%. I locked in a 5 year 3 weeks ago at 4%. As more CDs mature in 2023, I will lock in 5 year at whatever the rate is. Just like your 401k, look at the big picture over 40 years. Ive rate chased before, and opened a CD at "NoName" Credit Union, and it came back to bite me. EWP was ridiculous, online access was inexcusable, 40 min wait times if you call, and documents unnecessarily needing notarized. No thanks, but thats just me.
Kaight
  |     |   Comment #2
Does anyone else remember President Ford's "WIN" program in 1974? "WIN" stood for "Whip Inflation Now".

If the Fed drops to just 50 basis points at their December meeting, I suspect their current inflation fighting debacle will meet with the same fate as did "WIN".
CDsuckers
  |     |   Comment #49
I remember him falling down the stairs when debarking Air Force One.
On the other hand, Biden's fell up the stairs barking Air Force One.
mix
  |     |   Comment #3
I think the CPI numbers released on 11/10 and 12/13 will surprise up and the Fed will have to remain hawkish.
Choice
  |     |   Comment #4
No longer any limit on characters on this thread! All can respond
gregk
  |     |   Comment #5
A top twenty obscure and inscrutable comment from Choice in his voluminous catalog of those here.

Did we ever have a "limit on characters" in the Fed policy thread?
kcfield
  |     |   Comment #16
Choice: All who do respond ARE characters--that's what makes this a worthwhile website. If DA placed limits on characters, all we would be left with is a Lockean tabula rasa and Mother Hubbard's bare cupboards. Finally, remember that while inscrutability does no physical harm to felines--as does curiosity--it nevertheless confuses the cats quite greatly. Blunt is better than inscrutable, as long as the former is not smoked. Hopefully you will consider this point now that the foot is on the other shoe.
Choice
  |     |   Comment #17
Congrats, kcfield, go to the head of the class! Kudos of the day in your honor.
lou
  |     |   Comment #18
I'm not use to seeing metaphorical erudite comments on DA.
jimdog
  |     |   Comment #6
Call protected 2yr and 3yr CDs now 4.7% on Fidelity. Not bad
gregk
  |     |   Comment #7
Virtually all my currently held CD's mature Jan-Mar 2024. Naturally (and selfishly) I'm hoping for persistently high inflation until then (with the accompanying Fed rate hikes), but then falling like a stone once 5-7 year high-yielding renewals are safely on the books.

That just might happen.
LovinSomeCDs
  |     |   Comment #8
Within the next 6-8 months, you may have to consider breaking those early.
111
  |     |   Comment #11
#8 - “Breaking early” gets costly with Early Withdrawal Penalties above 6 months. If rates do plateau and threaten to turn down, one might also do the math on not breaking but just removing the interest and using it to buy new CDs before rates bottom out. Many (not all) FIs will let you do this.
fuzz688
  |     |   Comment #101
Why not get a share loan on the cd and buy a new one next year. I guess that's what you're talking about.
SouthernGirl
  |     |   Comment #102
fuzz688,
Excellent comment and advice! Can you provide a possible interest rate spread above the cd rate that you would be paying on the cd loan? I believe that each cd customer would need to contact the financial institution to get the percentage point above the cd for the cd loan interest rate. Based on that information, it might be beneficial to get a cd loan for the remaining term of the cd, reinvest the proceeds from the loan to a higher rate cd, not pay an ewp, and payoff the cd loan when the original cd matures.
SouthernGirl
  |     |   Comment #103
FYI, I just checked with GTE Financial and the interest rate spread above the cd rate is 3.00%.
fuzz688
  |     |   Comment #104
1.5 for me at Pelican credit union. I'm getting 3.63 that would make it 5.13 but everyone is not the same. Just call your bank.
fuzz688
  |     |   Comment #105
Edward Jones has a 5 percent for 5 years cd as of today.
milty
  |     |   Comment #9
#7: I selfishly agree, as 2024 is also a prime CD year for me. Hopefully the Fed, regardless of inflation, will resist a return to ZIRP and let assets make it on their own merits.
Mals
  |     |   Comment #12
I too have a fair amount maturing in mid-2023 and 2024. Rather than break and incur penalty, my immediate plan is to call and have them pay me the accumulated interest since inception of the CD. We have rights to withdraw the earnings with no penalty. I can at least reinvest that portion, which is fairly significant sum, at current rates.
CDsuckers
  |     |   Comment #14
I've already started to do that for the taxable CD's.
The 2024 CD's that I've got are at 3%.
I can get a 1% spread over that just buying short-term Treasuries.
There's not a lot of money to be gained.
But, with no EWP, it's free money.
For the IRA CD's maturing in 2024, it's more problematic.
It would be a taxable distribution and the proceeds will lose the tax exempt status.
So, for the IRA's there's not much to be gained unless the rates get over 5%.
However, I'm taking my RMD's for this year and next from the 2024 IRA CD's.
lou
  |     |   Comment #20
I will probably do that as well (withdrawing interest) but not quite yet. I still think long term rates are rising despite this momentary interval. If I break CDs maturing in 2024, I want to see 5-yr CDs north of 5%.
jimdog
  |     |   Comment #10
People, with rates near zero for 12 long years, we ain't going back there, that's one for the 100 year history books. What happened in the UK proves it! The bond vigilantes may drive rates to 6 percent before this is all over with. The FED and a liberal congress printed up to many trillions of dollars!
CDsuckers
  |     |   Comment #15
I wouldn't hold my breath on that one.
The FED's just dying to get back to ZIRP and QE.
How else is it going to protect the stock market bubble it created.
Inflation has forced them to temporarily sing a different tune.
This is just a small window of opportunity to purchase bonds and CD's at more normal interest rates.
Of course, those interest rates aren't normal when compared to inflation.
But, nobody wants to talk about that because it would put the stock market back 10 years if they did and where it belongs if it was a truly "free market".
Not to mention all of the unfunded Republican tax cuts starting with Reagan that have bloated the federal deficit.
At least the Democrats so-called Inflation Reduction Act raised taxes to cover the expense.
They didn't hide behind the fig leaf of the totally debunked trickle-down economics.
Remember the last time that the deficit went down was during Billy Boy's presidency.
Republican's talk the deficit talk, but don't walk it when lowering taxes on corporations and the rich.
In fact, the middle class tax cuts are set to expire.
Whereas the corporate ones are protected into infinity.
Xplain that one away will ya?
Deficit hawks, ya right.
lou
  |     |   Comment #21
Hiring 80,000 IRS agents is not the same as raising taxes, but hopefully you knew that already.
CDsuckers
  |     |   Comment #25
It actually does raise taxes (and, tax enforcement).
So I don't know WTF you're talking about (but then, either do you).

The following is from that Socialist rag call Forbes.

"The law calls for a tax of at least 15% on large corporations that earn $1 billion or more in “book income,” which is the amount of profit reported on their financial statements. The new corporate tax is expected to generate $313 billion in tax revenue.

The tax portion was included to ensure that profitable companies no longer pay $0 in income taxes. Despite reporting hefty book income, at least 55 large corporations—including FedEx, Nike and Dish Network—took advantage of tax breaks that allowed them to pay no federal income taxes in 2020, according to the nonpartisan Institute on Taxation and Economic Policy."

https://www.forbes.com/advisor/taxes/will-the-inflation-reduction-act-raise-your-taxes/
lou
  |     |   Comment #34
Read the fine print on that. There are many tax loophole they exempted from the 15% tax because special interests bribed Democratic lawmakers. So I don't know WTF you're talking about, as*hole.
CDsuckers
  |     |   Comment #39
Hit a nerve there, eh?
How about a source for your fake news?
lou
  |     |   Comment #45
accelerated depreciation deductions
wide assortment of general business credits, such as green credits, R&D, affordable housing credits, etc. The list is long.
claim credit for minimum tax for future years when regular tax exceeds minimum tax
There's more.

As for citations, I'm not your gopher, as*hole.
P_D
  |     |   Comment #31
All government spending is a tax.

"Keep your eye on one thing and one thing only: how much government is spending, because that’s the true tax ... If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or in the form of borrowing. The thing you should keep your eye on is what government spends, and the real problem is to hold down government spending as a fraction of our income, and if you do that, you can stop worrying about the debt."

-- Milton Friedman
milty
  |     |   Comment #55
#31: On this we agree that government spending involves a tax (or debt). Where we disagree is on what to spend our taxes on. I would cut military spending by 50% (currently over $1 trillion per year, utilizing almost 80% of the individual income tax) and spend some of the difference on environmental improvement, energy, health, and social security. And finally use some to pay down the debt.
CDsuckers
  |     |   Comment #68
Now Milty's gone over to the dark side by changing the meaning of words.
That's DA's Milty, not the Milton Friedman Ronald Reagan schill.
Ronald Reagan started the deficit ball rollling with unfunded tax cuts.
Supply-side economics never did work-out as sold to the American people because it's a myth.
But then, so is American Exceptionalism.
CDsuckers
  |     |   Comment #13
Here's a recap of the data set based upon the last CPI-U report available (not seasonally adjusted, includes food and gas prices).
Year-to-year (trailing inflation) had a very small tick down at +8.2%.
Six-month average annualized rate down at +6.48% (used for the iBonds inflation factor).
Month-to-month (current inflation) up at +0.22%, annualized 2.64% (used for the TIPS inflation factor).
The past inflation has definitely been trending downwards since the June peak.
The future inflation has definitely reached a plateau (the last three months have been essentially flat on the month-to-month).
As of today, the current 5 year TIPS yields are about 4.24% (2.64%+1.60%).
That gives them a practically non-existent edge of 0.04% over 5 year nominal Treasuries (currently at 4.20%).
The best 5 year CD out there is 4.42% (there's probably some non-callable brokered CD's out there that can beat that).
So, it looks like for terms shorter than 5 years, CD's are starting to look like the best deal out there.
For terms 5 years and longer, I'd give TIPS a slight edge.
Paying 0.18% for inflation protection seems to be pretty cheap insurance over a 5 year CD.
The TIPS yields have been falling of late (5 year peaked at 1.98%).
If CD's go over 5% and TIPS yields keep falling that may change.
If the FED goes 0.75% again, I expect the TIPS rates to go recover for a while.
The real kicker will be November 10th's inflation report.
That will set the tone for the December FED meeting.
And, the FED's response to that will speak volumes.
If they only do 0.5% on that one, the window of opportunity for CD's and bonds will begin to close.
lou
  |     |   Comment #22
Core inflation has been increasing, not decreasing, which is why the Federal Reserve freaked out after the last inflation report.
CDsuckers
  |     |   Comment #26
Core inflation is one of those fudged numbers (like seasonally adjusted inflation).
They strip-out food and gas.
How convenient is that?
Only this time around it backfired on them.
Let's see if they freak-out enough to raise rate 1%.
The CPI-U and CPI-W are the only inflation numbers that matter.
They're actually used to calculate the inflation factors for TIPS, iBonds and Social Security.
The rest of these inflation numbers are pure BS.
Inflation surveys of normal folks and economists are just beyond stupid.
Neither group has a clue what future inflation is going to be.
And neither does the "all knowing market".
Anything except real measured current versus prior month number is just pure conjecture.
lou
  |     |   Comment #35
LOL - The Fed uses core inflation measure to calibrate the Fed Funds Rate but I should ignore it because CDsucker thinks it's not important. Get the f*ck out of here.
CDsuckers
  |     |   Comment #48
CDsucker likes real statistics, not FED-Spin.
The PCE is like Frankenstein's dog without a head or a tail.
PS, you're not the gatekeeper.
Calibrate that!
111
  |     |   Comment #19
Perhaps this is not placed in exactly in the right thread - but for those still wanting to buy I-bonds before end-of-month, note the following in today's WSJ -

“As Investors Scramble to Buy I Bonds, TreasuryDirect Site Has Outages - Investors rushing to purchase I-Bonds with a six-month return of 9.62% are taxing the government website”
https://www.wsj.com/articles/as-investors-scramble-to-buy-i-bonds-treasurydirect-site-has-outages-11666817951?mod=hp_lista_pos1

Hmm. Wonder if the infamous Obamacare website developers from 10 years ago are now responsible for maintaining the TreasuryDirect site? Well, at least they still have jobs, bless their hearts. Gotta luv the gub'mint.
mix
  |     |   Comment #23
It was slow to load earlier in the week as well.
CDsuckers
  |     |   Comment #27
There is no thread on the web that's right for your comments.
111
  |     |   Comment #33
#27 - First *suckers - “There is no thread on the web that's right for your comments.” Actually, that response of yours caused a bit of wine to be spilled on my keyboard, inadvertently. Congrats, I guess. By the way, I take your response as a compliment.
CDsuckers
  |     |   Comment #40
Delirium tremens?
Call 866-210-1303.
111
  |     |   Comment #42
Delirium tremens? Nah.. Just alcohol-enhanced enjoyment of inanity. In this case, yours (the inanity, not the alcohol. So far as I know.)

For help - Call First Nation. Or maybe, CD Suckers, Or maybe whatever the one in between was called (I've actually got that recorded somewhere - but ya' know what? I'm not going to bother to check it right now, 'cause - wait for it - YOUR'E NOT WORTH IT!

Understand now?
CDsuckers
  |     |   Comment #46
Oh boy, resorting to ALL CAPS!
You forgot DAtroll.
Hell, I've forgotten a lot of them.
Help me out and find that list, will ya.
Maybe I should create 1111?
111
  |     |   Comment #77
#46 - "Help me out and find that list, will ya."  I could tell you exactly where you might search for that list, but that would engender my first comment deletion here in quite a while. So, I'll pass for now.
b3ck
  |     |   Comment #88
To comment #19 - LOL, doesn't surprise me. Old gub'mint 'quipment. Hey at least they try to be frugal. If it Ain't broke don't fix it!
PabloSavin
  |     |   Comment #24
I love the rates going up. We have over 15 CD’s coming due in 2023. Average is 3.3 percent. If I can get 4.5 plus for 5-7 years it will be great. Also have about 15 due in 2024. I love characters, they ,are the work go round!
LovinSomeCDs
  |     |   Comment #28
Wow, thats a lot of CD's!! If they are jumbos, you are one wealthy dude!
PabloSavin
  |     |   Comment #106
They are, and all should be higher than what they were paying before
CDsuckers
  |     |   Comment #29
Love the inflation that went with it?
The best case scenario that all of the purchasing power lost to inflation the last couple of years is gained back over the next 5 years.
Of course, that's assuming that CD rates outpace inflation over that term.
We'll see.
P_D
  |     |   Comment #32
As bad a threat as China and Russia are now to our economy, I think the worst threat comes from the MOGA Democrats. (Make OPEC Great Again). They have succeeded in reenergizing and refinancing the terrorist nations of the Middle East and other oppressive dictatorships in OPEC+ after President Trump finally put an end to their power and brought peace to that part of the planet (actually all parts of the planet).

In the last 20 months the MOGAs have depleted more of our Strategic Petroleum Reserves than all other US presidents COMBINED did in that same period of time draining them to a dangerous 40 year low level for purposes that were never intended. It is no coincidence that OPEC is taking advantage of America's low reserves to cut their production at a strategic moment and snub the MOGA Democrats as they beg them for cooperation so things won’t look so bad at the pumps before the election. The real carnage will probably come after the election when there are no more reserves to drain and the US energy exploration effort that the Democrats abandoned 20 months ago starts showing results as the terrorist OPEC nations flex their muscles once again.

Russia, China and now even India are laughing at us while they move full speed ahead with fossil fuel development. Meanwhile Americans are paying the price for this MOGA madness and getting none of the benefits because without those countries there is no reduction in pollution. It’s insanity.

Biden boasts how clever he is that if oil falls below $79 a barrel he will refill the reserves saving American taxpayers part of the billions of dollars it will cost. When Trump was president he refilled them at $24 a barrel. Again the MOGAs are gaslighting and robbing us.

The cost of energy is central to any economy (and inflation and interest rates) because it is built into the cost of everything.  And the MOGA Climate Changers have turned back the clock to high energy prices, less wealth and much more danger for Americans (and the entire planet).
gregk
  |     |   Comment #36
How does this relate to Fed policy, PD, - ill-advised as it may be to ask?
P_D
  |     |   Comment #37
For those who have not noticed the topic of the blog is:

"Federal Reserve, the Economy and CD Rate Forecast"
gregk
  |     |   Comment #41
When were we last out to the woodshed, PD?

The topic is how Federal Reserve policy impacts the Economy & CD rate prospects.  It's not an invitation to introduce idle thoughts on whatever Economic topic of the moment you may find a convenient instrument for the political skewering we've all had to endure how many hundreds of times previously?
GreenDream
  |     |   Comment #96
Sorry, gregk, but you are trying desperately to read into it (for the purposes of silencing speech you don't like - and shame on you for trying to do so) a limitation that the author himself doesn't seem to support. Per the comment at the end of the article "Please keep comments focused on the Fed and the economy. Politics can impact the economy" Notice it says "and the economy" not "and how Fed policy impacts the economy" and it says "politics can impact the economy" and not "politics can impact the effect of fed policies on the economy"
zCairo1
  |     |   Comment #111
And Biden planned to go one step further - eliminate natural gas. Until northern states said we would freeze in the winter. Free-speech -- I believe P. D. made a good point. The elimination of natural gas would cripple a lot of industrial sites that use natural gas as feedstocks. (My site included!)
CDsuckers
  |     |   Comment #38
Report post and don't feed the troll!
GreenDream
  |     |   Comment #51
I reported your post as you requested, sadly I'm currently feeding the troll (you). well one out of two ain't bad.
CDsuckers
  |     |   Comment #64
Duly noted, WetDream.
I wonder if they'll let me use that name when I tire of CDsuckers?
111
  |     |   Comment #71
#64 - How about "First TrollSucker"? You know, kind of gathers all your multiple personalities together...
111
  |     |   Comment #76
See? I didn't forget "DAtroll" after all!
GreenDream
  |     |   Comment #95
C*CKsuckers. since you'll be changing you handle soon enough, I dare you to go for it and find out.
mffarrell
  |     |   Comment #43
PD sometimes I think you are actually rational and sane, then you post this.
Choice
  |     |   Comment #44
So much for character limitations
GreenDream
  |     |   Comment #52
I can certainly think of a few choice characters around here that need limitations, but this site hasn't limited them so far.
CDsuckers
  |     |   Comment #69
What do you expect?
He's a Ronald Reagan fan boy.
You know, the Alzheimer President.
Dementia is as dementia does.
milty
  |     |   Comment #53
Appears that U.S. corporations are also laughing at us at they export record amounts of U.S. petroleum products and of course reap record profits.
https://www.ogj.com/general-interest/economics-markets/article/14283286/eia-us-exported-record-amounts-of-petroleum-products-in-firsthalf-2022
CDsuckers
  |     |   Comment #70
Hey, it was Obama that signed the bill getting rid of the ban on exporting US oil.
milty
  |     |   Comment #82
Yes, good point, and bailed out the bankers, too. I suppose that although U.S. oil corporations are allowed to export oil, it does not necessarily mean they are required to.

Hmm, looks like there is more to that Obama story:


"The House of Representatives voted on Friday to lift a 40-year ban on the export of crude oil, delivering on a top legislative priority for the oil industry and setting the stage for a new clash with the White House over energy.
The 261-159 vote seeks to end a ban put in place during the Arab oil embargo of the 1970s. Twenty-six Democrats voted with Republicans in support of the measures.
The bill now moves to the Senate where its prospects are uncertain because of White House threats to veto any measure that ends the crude export ban.
Lifting the ban, Republicans argued, would end a growing glut of domestic oil. Ted Poe, a Republican from Texas, argued that Obama would rather Iran help sell its oil abroad, through the nuclear deal, than US domestic oil producers."
https://www.theguardian.com/business/2015/oct/09/us-crude-oil-exports-house-of-representatives-vote-...

So, this was initially a Republican wish, which I assume the Senate amended to include some Democrat wishes, and hence got passed.  But that's another story.
sharon907
  |     |   Comment #54
Disappointing - but never a surprise - that PD does not articulate a rational strategy to reduce "oil" costs, in America.

Nationalize oil producers? To prevent them from selling their product internationally?

Another war, perhaps?
CDsuckers
  |     |   Comment #65
You're full of beans!

PS

You should have never admitted to being some sort of vegetarian.
lostsoul
  |     |   Comment #97
He did.. the answer is Trump.. =-) You know when we didnt have all these issues. Trumps oil policies is easy.. America first, get it here, employ many here, etc. Added to our National Reserve (cheap) while Biden blows it all to keep the cost only 120% over. and secretly sells to China .lol but hey.. he sent mean tweets..
Dmordini
  |     |   Comment #50
Can anyone comment on where the 10yr will go or when to jump in?
Duck
  |     |   Comment #56
I do not post much I tried other year telling y'all what was coming I even tried to do it in easiest way possible but just listen to PD do not knock him yes he might go little deep trying to explain in layman's terms what the @#$% is going on but if you look at Diesel lately instead of squealing an squabbling over a .10% here .10% there. You will see WE yes US pretty much do not have any an it is the backbone of everything fro commerce to pretty much life oh an winter is right around the next bend. Now yes this just leads to a more inflationary environment for the foreseeable future. But what good is it if we start getting 5-6% cd's if our $$$ is crushed by yeah right 8.2% inflation that is only a 1/3-1/2 of the real inflation we have and will continue to see Y'ALL better grease the bearings in your wheelbarrow if you wanna go to the grocery store just like gas going down oh my wait till after the election somebody's gonna have to pay and say it with me it isn't gonna be that big house on Pennsylvania ave it you me an everyone else that pays
Duck
  |     |   Comment #57
Oh FYI our Diesel is 30 days to depletion oh yes sad times hate to be such a pessimist but it has served me well when I see stuff that just is not right
111
  |     |   Comment #80
“Roast Duck”? Well depending on whether he also uses fuel oil (in addition to diesel), it could be Cold Duck as well! All thanks to Clueless Joey B.!
LovinSomeCDs
  |     |   Comment #62
More doom and gloom. Been happenings for centuries, and will continue on for centuries. Work, save money, vacation, eat good food AT HOME, stay close to family...rinse, repeat. Ive lived that way for decades, and will continue to do so. When the final bell rings....so be it, it was a good ride....
CDsuckers
  |     |   Comment #66
You happy go lucky people drive me crazy!
That includes my Hawaiian wife.
Geez, nothing bothers those folks.
111
  |     |   Comment #79
Hey Sucker - has it ever occurred to you that, just maybe, people from Hawaii don't have to rely on heating oil? Or even rely very much on diesel oil? Just a thought...
b3ck
  |     |   Comment #89
to #79 - They still use oil for electricity & all shipments which is everything comes via oil- just saying..and I can understand why nothing bothers those folks; they live in Hawaii!
111
  |     |   Comment #81
Duck, #56 - Not to worry, man. The Powers That Be really DO have a plan for us! Joey B. the Omnipotent will really make everything OK on November 9, 2022! That's right! At that time, all solar power will begin producing electricity even when the sun don't shine. And all wind power will likewise produce power even when it's calm. Oh, but - did I forget to say that these miracles will happen only if everyone votes his way by November 8?

Specifically, regarding the diesel oil shortage? Joey B. is going to use his mad negotiating skills (you know, the same ones he used when he went to Jeddah a few months ago) that were so successful in negotiating increased Saudi oil production! Second time's the charm, right? At least that's the working hypothesis for now...

Umm - you might want to cut some firewood, man. Just in case. At least that's something Joey B. doesn't have a whole lot of control over. So far, anyway.
spentcattle
  |     |   Comment #58
4.9 five year cds are available at schwab.
Not callable.
Rickny
  |     |   Comment #59
Inflation is getting out of hand:

My natural gas costs have almost DOUBLED and we haven't hit winter.

Just got a letter that our Community Electric is being disbanded because of increase of supply costs. So we lose a low fixed rate for supply of 6.5 cents and now is variable. Current bill 10.5 cents.

Gasoline was $3.37 last week, now $3.59.

Bought yougart I like today 4 pack. Regular price was $4.19 last week. Today was $4.99.

Eggs were $3.29 last week. Now $4.29. Went to Aldi ony $3.89. I know I'll get that one person who says inflation does not affect them. So we get higher savings rates offset by inflation.
CDsuckers
  |     |   Comment #67
Man, I envy you.
We haven't seen gas under $5 a gallon in Southern California for quite a while now.
Even you're electricity rates are cheap in comparison to ours.
But, I don't envy living thru a NY winter.
Rickny
  |     |   Comment #73
That rate is just the supply charge. When you add delivery and taxes it's closer to 20 cents kilowatt.

California has a special blend of gas, high taxes and carbon trade offs hence the high price. NY also suspended the gas tax of 16 cents till after the elections which keeps the cost down for now.
Choice
  |     |   Comment #74
Rick, as I recall were you going to move to nc this year…how did that go?
CDsuckers
  |     |   Comment #75
They tarred and feathered the yankee dog.
111
  |     |   Comment #78
Nahh - carpetbaggers from blue states are welcome so long as they properly cleanse themselves regarding the reasons they fled. After all, even back in the day Ellis Island had its famed delousing protocols... Worked out to the betterment of all concerned!
milty
  |     |   Comment #83
It appears that rule, like all the others, did not apply to the Trump family.
CDsuckers
  |     |   Comment #84
You shouldn't talk like that about our past and FUTURE POTUS!
Well, maybe taking out the TU would be more appropriate.
b3ck
  |     |   Comment #90
To #59 - You could always eat some cake - JB
P_D
  |     |   Comment #85
It's never been said better. And if you think it is not right on topic, or not currently relevant, you are not paying attention.

https://www.youtube.com/watch?v=VPlQ-ANUCuc
milty
  |     |   Comment #86
Paul Harvey is surely seen by some as the "conservative talk-radio pioneer."

"Known for his staunch conservatism -- he called it 'political fundamentalism -- Harvey supported McCarthyism in the 1950s. 'There was a dirty job to be done and it took a roughneck to do it,' he said later."

"In the ‘60s, a time when he viewed America’s biggest problem as one of “moral decay,” Harvey echoed the sentiments of many older Americans by saying that he felt like “a displaced person” in his own country. “I never left my country; it left me,” he said."

"He blasted homosexuality, left-wing radicals and black militants at the time and reportedly was a close second to Gen. Curtis LeMay to be running mate for unsuccessful third-party presidential candidate George Wallace in 1968."

But he was not, however, such a right-wing extremist that he could not occasionally separate what is right from the Right.

"But in 1970, Harvey shocked many of his listeners with his most famous broadcast. In the wake of Richard Nixon’s expansion of the Vietnam War into Cambodia, Harvey said, 'Mr. President, I love you. But you’re wrong.'"

"Harvey’s about-face, which he later acknowledged 'was shattering to my old American Legionnaire friends,' triggered a flood of some 24,000 letters and thousands of phone calls from outraged listeners."

"And while he favored the death penalty and railed against growing taxes, welfare cheats and forced busing, Harvey would again veer to the left by supporting the Equal Rights Amendment and abortion rights and criticizing the Christian right for attempting to impose its views on others."

He was also quite well educated (having "earned both a bachelor’s and a master’s degree in English in Arts & Sciences from Washington University") and well off, enough so as to easily be seen as an elite.

"For years, he’d rise at 3:30 a.m. and be picked up by limousine in front of his 27-room house in suburban River Forest." And he "had a net worth of $150 million at the time of his death in 2009."

“Now you know…the rest of the story." This is milty . . . Good day.
QuickSilver
  |     |   Comment #87
One of the best books I've recently read is, "The Lords of Easy Money".

IMO, Powell was not a true believer in "Keynes on steroids" policies of Bernanke and Yellen. He and Elizabeth Duke reluctantly got on board so as not to be rendered irrelevant. The low rate of nominal inflation at the time also facilitated this change in attitude.

Powell is now in charge of draining the oceans of liquidity that "Helicopter Ben" and Yellen foisted upon us. He has constantly reminded us that, before Volcker, the Fed was too quick to back off fighting inflation and that he will not repeat that error.

Nothing in the data released since the last meeting provides any basis for any letup in their hawkish policy. I'll be very suprised if they don't go 75bp and maintain their hawkish tone in the statement and press conference. Correcting the consequences of the reign of easy money, and the resulting inflation, may take far longer than currently estimated.

I'd like to see the Fed get QE and ZIRP in the rear view mirror ASAP. Keynes advocated reversing government stimulus as soon as the economy came out of a recession. As much as I agree with that approach, I seriously doubt politicians of either party will ever commit to it.
P_D
  |     |   Comment #91
I think the only economic theory that has done more damage to the economy than Keynes' economic theory is Modern Monetary Theory -- a failed economic theory taught in inferior colleges that has now been proven an abject disaster.
111
  |     |   Comment #92
Anyone interested in the opinions and works of Keynes (no matter what one thinks of such opinions), might want to read the book “Keynes’ Way to Wealth” by John Wasik. It's an interesting recitation of the actual investment philosophies Keynes used in the path to creating his personal fortune (and also much of the fortune of Cambridge, where he was both Don and administrator).

Lo and behold, it turns out that the Keynesian theories he used to develop his own fortune, and in part that of Cambridge, had little to do with his much more famous macroeconomic theories of what nation-states should do in bad economic times (basically, print and give away money)! Imagine that.

Instead, his own personal theories and practices were much more aligned with what, in our modern times, is now called “behavioral economics” - the “power of the crowd”, the “momentum of investing”, and all that (Thaler, etc,). And that, in large part, is how he made his and much of Cambridge's fortune. The book is both illustrative and ironic.
slickwilly
  |     |   Comment #93
Data means nothing….the Fed chair and other members do what they are told to do by their political handlers…..
gregk
  |     |   Comment #94
Their "political handlers" being whom, - and what are they being told to do by them, and with what rationale?
lostsoul
  |     |   Comment #98
We are shuffling chairs on the Titanic.. haha
We are in a time where the veil is off for all to see for those that want.

Here is Cramer Admitting on live Tv they are Government Propaganda for Covid.
https://rumble.com/v1r0pzc-cnbcs-jim-cramer-calls-for-state-run-propaganda-to-spread-covid-vaccines.html

Here is another small 5% audit the AZ Senate did with the 2020 election. (audio kicked in after 10-20min) WITH tons of
real ballot/envelopes/Sigs shown. Only a 24%-ish fraud rate so far.. nothing to see..lol Of Course Jovan pulitzers forensic audit I showed before was more complete with the full 2.1 M ballots and much worse then this. But, a fraudulent government has no impact on the Feds or economy.. not at all.. =0)~

https://rumble.com/v1r60iu-az-legislators-hold-bombshell-presentation-revealing-newly-discovered-2020-.html
Fussybob
  |     |   Comment #99
Will 7/10 year treasury notes go to 5%+ in the coming months?
slickwilly
  |     |   Comment #100
They might….and may even go higher. Good luck collecting….not sure this financial charade can last too much longer….US is Broken…and broke too. If its not in “your hand” you don’t really have it…….do you?
lostsoul
  |     |   Comment #108
agreed.. I was ponding buying another house if and when the housing collapses again and rent it out. lol but in this state they have made that process a nightmare.. Its all a losing battle.. They can print more Dollars, They can dig for more gold, Its all about timing everything... which Im bad with... ahhhh Dump everything in a fidelity GO account? what can go wrong.. lol
b3ck
  |     |   Comment #109
when do you think this housing collapse will happen?
premmer
  |     |   Comment #110
"NY Fed: Bank Liquidity May Be Tighter Than Thought, With Policy Implications"

This sounds scary

https://news.yahoo.com/ny-fed-bank-liquidity-may-204547977.html
Federal Reserve, the Economy and CD Rate Forecast - Sep 13, 2022

With the next Fed meeting just a week away, I thought this would be a good time for another Fed summary with a preview of what to expect. The two-day meeting is scheduled to start on the 20th with the statement released at 2:00pm EDT on Wednesday the 21st. In addition, the Fed will release an update to its Summary of Economic Projections (SEP). At 2:30pm, Fed Chair Powell’s post-meeting press conference will take place.

Before today, expectations were high that the Fed would hike 75 bps. With the August CPI...

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Federal Reserve, the Economy and CD Rate Forecast - Aug 30, 2022

After four weeks since my last Fed summary, I thought this week after the Fed’s Jackson Hole Economic Symposium would be a good time for a new summary. Top economists from the Fed and other central banks attend Jackson Hole, and news is often made by the Fed Chair’s speech. Fed Chair Powell's Jackson Hole speech on Friday was a little more hawkish than had been expected, and thus the odds of another 75-bp rate hike at the Fed’s September 20-21 meeting have increased some. The speech didn’t put to...

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Federal Reserve, the Economy and CD Rate Forecast - Aug 2, 2022

Future Fed summaries will no longer be published every Tuesday. Instead, the summaries will be published around once a month, typically one or two weeks before Fed meetings and after any important news on monetary policy. I’ll put more emphasis on the Wednesday summaries that cover rate changes and top rates of CDs and liquid accounts.

The Fed increased the target federal funds rate by 75 bps last week. It’s the second straight 75-bp rate hike, and it raises the target to the same level as the peak of the 2015-2018...

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Federal Reserve, the Economy and CD Rate Forecast - July 26, 2022

The FOMC meeting will conclude on Wednesday with the statement scheduled for release at 2:00pm EDT. Fed Chair Powell’s press briefing is scheduled for 2:30pm ET. Expectations are high that the Fed will announce a 75-bp rate hike.

If the Fed hikes 75 bps on Wednesday, the target federal funds rate will be back to the peak level reached during the last cycle (2.25%-2.50%). That would be about 4.5 months of rate hikes that would equal the three years of rate hikes from 2015 to 2018.

The fast pace of the Fed...

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Federal Reserve, the Economy and CD Rate Forecast - July 19, 2022

The release last Wednesday of the June CPI report, which showed inflation at a four-decade high, had the markets and many economists thinking that the Fed would again increase the size of its rate hike, this time to 100 basis points (bps) at its July 26-27 meeting. By the end of Wednesday, the Fed Fund futures market (via the CME FedWatch Tool) was showing odds of a 100-bp rate hike to be 80%, up from 9% the day before. Those high odds didn’t last. Fed officials started to downplay the...

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