Federal Reserve, the Economy and CD Rate Forecast - March 19, 2019
The Fed’s two-day meeting started today. The meeting announcement is scheduled for 2:00 PM ET Wednesday. In addition to the meeting announcement, the FOMC forecasts will be released. These include the “dot plot” which shows the projections of future federal funds rates. Lastly, at 2:30 PM, Fed Chair Jerome Powell will be holding a press briefing.
No rate change is expected at this Fed meeting. If that happens, it will be the first break of the Fed’s quarterly rate hike pattern. The Fed has been consistently hiking rates after every other meeting since December 2017. The first four rate hikes before December 2017 weren’t regular (Dec 2015, Dec 2016, Mar 2017 and Jun 2017).
So if the meeting goes as expected, it will signal the start of another rate pause in which the Fed follows through on its message of being patient as it waits for more economic data.
One interesting thing to look for is how the Fed’s updated economic projections change. The “dot plot” will likely change and no longer point to two rate hikes in 2019. It may also indicate that a couple of policymakers are expecting a rate cut in 2019. Economist Tim Duy had this to say regarding the dot plots in his Fed Watch blog post:
With growth downshifting, inflation soft, and rising concerns about deteriorating inflation expectations, the Fed has the opportunity to sharply pull down the expected path of rate hike and wipe out the two 2019 rate hikes expected at the December meeting.
The market has already wiped out expectations for any 2019 Fed rate hike. The Fed Funds futures show zero chance of a rate hike in 2019. This is the same as last week. The only change from last week is an increased chance of a rate cut. The futures now show a 25.6% chance that the federal funds rate will be lower by December. That’s up from 19.2% last week.
Treasury yields changed little from last week. The 1-month yield had the largest change, rising 3 bps to 2.47%. The 1-month yield is now higher than the 5-year yield (2.42%) by 5 bps. Fortunately, the 1-month/5-year spread isn’t the metric used to predict recessions. It’s the 10-2 spread (the difference between the yields of the 10-year and 2-year Treasury notes). The 10-2 spread is now 15 bps, down from 16 bps last week. A negative 10-2 spread has a history of preceding recessions.
The following numbers are based on Daily Treasury Yield Curve Rates and the CME Group FedWatch.
Treasury Yields (Close of 3/18/19):
- 1-month: 2.47% up from 2.44% last week (1.70% a year ago)
- 6-month: 2.51% down from 2.53% last week (1.99% a year ago)
- 1-year: 2.52% same as last week (2.08% a year ago)
- 2--year: 2.45% same as last week (2.31% a year ago)
- 5--year: 2.42% up from 2.41% last week (2.65% a year ago)
- 10-year: 2.60% down from 2.61% last week (2.85% a year ago)
- 30-year: 3.01% up from 3.00% last week (3.09% a year ago)
Fed funds futures' probabilities of future rate hikes by:
- Mar 2019 - up by at least 25 bps: 0.0% same as last week
- Jun 2019 - up by at least 25 bps: 0.0% same as last week
- Sep 2019 - up by at least 25 bps: 0.0% same as last week
- Dec 2019 - up by at least 25 bps: 0.0% same as last week
- Dec 2019 - down by at least 25 bps: 25.6% up from 19.2% last week
CD Interest Rate Forecasts
If it appears that the Fed will keep rates steady for all of 2019, don’t expect any nearterm rate hikes on CDs. In fact, there will likely be downward pressure on CD rates. We have already seen this downward pressure in the last few months. First, Treasury yields declined in November as economic concerns grew. Then the brokered CD rates declined, and lastly, several direct CD rates declined.
I think it’s likely that this trend will continue, and the more negative economic news we get, the longer this trend will last. As I mentioned in previous weeks, this may continue until we see a steady stream of strong economic data and increased odds of Fed rate hikes. We’ll see on Wednesday how optimistic the Fed is about the economy for 2019.
The above graph shows the rate trends of the average CD rates. These average rates are based on all the rate data that we have collected over the years. This is an interactive graph. You can choose the term of the CDs (from 3 months to 5 years) and the look-back period (from 3 months to 5 years). As you can see in the graph, average CD rates for all terms have increased in the last year with the largest gains occurring after March 2018.
Note: This Fed and economic overview used to be part of my weekly summary, but it will now be a separate post. My weekly summaries will now be focused entirely on deposit rates and deals, and they will be published on Tuesday evenings.
The global monetary reset will start on August 1st this year and may expire the FED mandate for good. Big changes are coming to the dollar too, so be vigilant and do not listen to MSM for any confirmations or advance notices, they work for the globalists/democrats and Trump and the American people want to neutralize them for good.
What you say is total nonsense.
https://www.newsbusters.org/blogs/nb/pj-gladnick/2019/03/18/ted-koppel-trump-not-mistaken-about-biased-liberal-media
BASEL III is international banking and exchange rules and guidance based on the gold standard:
https://basel-iii-accord.com
https://www.federalreserve.gov/supervisionreg/basel/USImplementation.htm#Basel_III_Announcements
https://www.bis.org/bcbs/basel3/b3_trans_arr_1727.pdf
https://www.youtube.com/watch?v=on0w9X_0oIk
Educate yourself people, do not depend on the media to make you dumber.
It is not a gold based standard or anything like it. Gold is discussed as a stable asset, which it historically has been. When people skim very complex data and come up with this type of nonsense I know our educational systems have failed.
Spread the manure if you want but, like so many other issues, your opinion has no value.
For the first time in 42 years, gold is being brought back into our financial system as money.
https://thedailycoin.org/2019/02/07/as-basel-iii-gets-closer-to-reality-central-banks-are-buying-gold-hand-over-fist-because-it-carries-no-capital-requirements/
https://nationalinterest.org/commentary/basel-iii-brings-gold-back-7809
https://seekingalpha.com/article/1016161-basel-iii-and-gold?page=2
https://philosophyofmetrics.com/masking-sdr-new-gold-standard/
Brokered read the third option in the last short cut, where Trump is going to make the dollar on the gold standard and please be nice to posters, they are really posting the truth, I verified all of the facts as true.
An article from 2012 that simply states some use gold to pay or back debt. Parker Schanbel should be consulted!
On the other side of the isle, this is what the democrats want to do with our savings, money and assets (after they confiscate them of course):
https://news.grabien.com/story-sen-warren-pitches-more-100-trillion-new-spending-during-bri
Also, you can buy, sell. carry or deposit gold instead of cash, do you see the difference now?
https://investingnews.com/daily/resource-investing/precious-metals-investing/gold-investing/trump-gold-standard/
It seems to me that with the central banks and the IMF the globalists are trying to create a one world currency akin to the Euro. That scares me more than anything else as we would then become like Germany and paying high taxes to bail out all the poor countries around the world.
For some strange reason it always goes back to gold? Strange. That's not failure. That is Capitulation and Vindication. I pity your for basing all possibilities in the universe on your short lifespan.
Whoa, hang on, I don't think "...working people of America as collateral," would go over too well with the 'working people'. That sounds like slavery, doesn't it?
It is very clear to me.
Trump is not in control of interest rates, except very indirectly, in that he appoints the chairman of the Federal Reserve Bank, who thereafter acts independently of the White House both in theory and, historically, in practice. What evidence do you have to support your assertion, especially bearing in mind that Trump has repeatedly, in public, derided chairman Powell when rates were raised?
They know their mandate is at stake, they are trying to save themselves from being greedy by their own making.
Everything will come to a hold, why, this nation can no longer afford to pay the interest on the already borrowed money. The welfare programs and the illegals suck close to $500 billions per year (excluding the entitlements), now do the math and come back with reasonable expectation.
Btw, I do have a little gold and silver but it's minimal.
"there are millions web sites with relevant info"
lol
https://www.globalcurrencyresetfacts.com/
Apparently this theory has been floating around for a long time and it is used to scam people into making bad investments, buying gold and keeping the food preppers and bunker builders in business.
We made it through 1999 and 2012, remember all the doomsday talk back then. We're still here, at least I am...……..Heh!
Be proactive, your opinion matters and we can fight the evil doers, otherwise your money will disappear in a whim if the democrats take the senate too. No man is an island on its own, we all depend on each others for everything, be smart.
Poppycock.
Put down the booze. Get off of YouTube. Go get a job.
.
https://en.wikipedia.org/wiki/Harold_Camping
"In press conference, Powell to emphasize economy strong enough not to need a rate cut "
Gee, or why not just say, "Savers, put your money in the stock market or else . . ."
In my opinion that is racist, income based on idea not merit, it does not matter if you have skills or not, same income for everyone, UTOPIA on steroids.
https://legalinsurrection.com/2019/03/finland-government-collapses-over-universal-health-care-costs-bernie2020-hardest-hit/
So far Navy still has the 40mo IRA CD, don't "qualify" for that but have other's there, also used that to prod my other local CU into giving me the rate.
At least I still about 2 yrs on my 3.1's at navy :)
I took her advice and have the 3.75% all set just in case i want to move more IRA money into it next year.
She said she doesn't anticipate anymore rate hikes for at least 18 months!
Do you people think of the national debt as reason not to raise the rates ever, it will mean the end of the dollar after a missed payment on the national debt and with that, all of your savings will be nullified to $0.00.
https://www.youtube.com/watch?v=ngKBAXhj36Q
Second, a direct transfer would work, but might take a while to process. If you are concerned that Navy might withdraw the 3.75% offer before your direct transfer paperwork is settled, you might consider instead starting that IRA with a $100 contribution (at this point in time, I believe it could be for either 2018 or for 2019). You can do this ONLY if you have earned income of $100 or more for that particular calendar year.
Now if you DON'T have $100 or more in earned income for calendar year 2018 or so far for 2019, then you need to have someone pay you at least $100 for some kind of work in 2019. For example, you could give your maid $100 worth of fashion advice, and she could write you a check for that amount. In that eventuality, I'd advise listing the $100 as income on your 2019 income taxes next April.
George is right, Jeniffer has no business being in business without being registered as business, I hope you can get that as fact, I used to be an accountant and IRS thrives on those hobby business claims and the taxpayers are audited for anything after IRS put you in the scammer's file.
Now above a certain amount of income per year, one may have to pay self-employment tax, but that's a different matter.
Bottom line, if A and B agree that A will pay B $100 for doing a specified amount of mental or physical work, that is earned income according to the IRS definition, for IRA purposes. Of course as I stated, B must also list this as income on his tax return.
https://www.irs.gov/retirement-plans/plan-participant-employee/who-can-participate-in-a-simple-ira-plan
https://www.irs.gov/retirement-plans/plan-participant-employee/who-can-participate-in-a-simple-ira-plan
larry, it seams you are afraid from them, have you done something naughty and do not want to call them?
https://www.thecollegefix.com/american-political-thought-course-at-cu-denver-removes-all-white-men-from-curriculum/
You can smell the fear on this forum. It's quite amazing how quick people are to embrace the dumbest ideas, from the dumbest people. It's the primary way politicians gain power. Scare the daylights out of you, promise only they have the solution and then, after they are elected, go about controlling YOUR life for the direct benefit of THEIRs. Power corrupts and absolute power corrupts absolutely. Vote D and find out how it all works!