Federal Reserve, the Economy and CD Rate Forecast - Feb 19, 2019


Signs still point to the Fed holding steady on rates for at least the first half of 2019. As more economic data comes out in the coming months, we’ll have a better idea on the odds of Fed rate hikes in the second half of 2019. Recent economic data does point to a slowdown in 2019, but that doesn’t mean that a recession is coming. Economist Tim Duy described this condition in his recent Fed Watch blog post. In his bottom line, he says:

The economy is set to slow in 2019 and such an outlook is supported by early indicators. Slowing is not recession.

If the slowdown is minor, it might just mean a rate pause from the Fed. However, if the slowdown deepens, we could see a Fed rate cut before the end of 2019.

It should be noted that when the Fed ended its rate hikes in June 2006, it held steady until September 2007 when it started to cut the federal funds rate. If history repeats, that means the Fed won’t be in a rush to cut rates, but it also means that we won’t see rate hikes after a pause. Of course, there are many reasons to believe that things will be different than 2006-2007. That time was before the bursting of the housing bubble, the global financial crisis and the Great Recession. Also, the current federal funds rate (2.25% to 2.50%) is less than half of the federal funds rate in 2006-2007 (5.25%).

The minutes of the January Fed meeting are scheduled to be released on Wednesday. That may provide us more insights into what the Fed is thinking. The Fed’s next meeting on March 19-20 will be an important one in that it will confirm the start of the pause if the Fed holds rates steady. Also, the Fed will be releasing an updated “dot plot” which shows Fed member expectations on future federal funds rates. In December the “dot plot” suggested two rate hikes in 2019. That will likely drop to one or zero.

According to the Fed Fund futures, the odds of any Fed rate hike for the first half of 2019 are zero. The odds don’t increase much for the second half. They’re just under 2% for a rate hike by December. These odds were the same last week. The only change from last week is a slightly higher chance of a rate cut by December. It’s now 13.0%, up from 11.6% last week.

Treasury yields changed little from last week. The 2-year yield had the largest change, rising only 2 bps from last week. Consequently, that narrowed the 10-2 spread (the difference between the yields of the 10-year and 2-year Treasury notes) which is now 15 bps, down from 17 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 2/19/19):

  • 1-month: 2.44% same as last week (1.35% a year ago)
  • 6-month: 2.52% up from 2.51% last week (1.83% a year ago)
  • 1-year: 2.54% down from 2.55% last week (2.00% a year ago)
  • 2--year: 2.50% up from 2.48% last week (2.21% a year ago)
  • 5--year: 2.47% same as last week (2.63% a year ago)
  • 10-year: 2.65% same as last week (2.87% a year ago)
  • 30-year: 2.99% down from 3.00% last week (3.13% 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: 2.0% same as last week
  • Dec 2019 - up by at least 25 bps: 1.8% same as last week
  • Dec 2019 - down by at least 25 bps: 13.0% up from 11.6% last week

CD Interest Rate Forecasts

For the last several weeks I’ve been mentioning my opinion that many banks will end CD rate hikes, especially on long-term CDs, as long-dated Treasury yields decline and with very low odds of any 2019 Fed rate hike. Fortunately, we aren’t seeing any widespread CD rate cuts, and we are still seeing banks and credit unions coming out with competitive CD specials. However, I learned of a new reason to be pessimistic. The Federal Reserve recently published the Senior Loan Officer Opinion Survey on Bank Lending Practices. In the survey, it showed weakened demand for loans to businesses and households. Loan growth helps drive banks to raise deposit rates. So if loan demand weakens, that will put downward pressure on deposit rates.

As I mentioned last week, I think short-term CD rates will generally hold pretty steady until the odds of a Fed rate hike or cut grows. Long-term CD rates may have downward pressure for some time until we see strong economic data that increases the odds of a Fed rate hike.

If the economic data weakens and the Fed starts to suggest the possibility of rate cuts, we may then see widespread rate cuts on CDs.

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.

Jennifer   |     |   Comment #1
I simply adore these articles.

Attention readers. Now is your one chance. Open a Mountain America Term Deposit Plus 5 year CD for only 5 bucks and lock in the 3.51% APY.
You can add money into it at any time during the term.
As long as you have 5 bucks for funding and 10 bucks a month to spare (as you must setup an automatic minimum monthly 10 buck contribution). Don't rate till the rate is gone.
Andrew McCabe
Andrew McCabe   |     |   Comment #4
I have three Mountain America Term Deposit Plus 5 year CDs. I purchased each one as the rates got higher for each. I purchased each one for an initial deposit of $5, and have had the required $10 monthly deposit made to each of the three Term Deposit Plus CDs, each month. Should I close the two Term Deposit Plus CDs purchased at the lower interest rate, and pay the required Early Withdrawal Penalty on each CD, and keep only the Term Deposit Plus CD that pays the 3.51% APY, or should I keep all three of the Term Deposit Plus CDs open?
Mak   |     |   Comment #5
You do know there is a max of $100k per primary member so if you have 3 under the same primary member number you still can only open a total of $100k..... so about $33,333.00 each.
If your wife is a member and you and maybe a trust than that I believe would be considered 3 accounts and $100k in each max.
Andrew McCabe
Andrew McCabe   |     |   Comment #7
I am going to keep the minimum in each of the lower interest rate accounts. I will put as much as I can in the 3.51%APY account, maybe not put the full amount in that account for another year or so. I'm trying to decide if it is better to pay the two Early Withdrawal Penalties and close the two lower interest rate accounts and free up more room in the higher interest rate account, or if it is better to just keep all three Term Deposit Plus CD accounts open. What do you think?
Mak   |     |   Comment #13
I closed one and opened a different one, the penalty came to $2 I think...:)
MAcd   |     |   Comment #22
I was told my a CSR that I could open multiple $100k CDs. I opened two
Mak   |     |   Comment #25
Benefits of Term Deposit Plus
Only $5 to open account
Higher dividends earnings than a traditional savings account
Funds can be added at anytime
Terms from 6 months to 5 years
Requires automated monthly deposit of at least $10

* APY = Annual Percentage Yield. Early-withdrawal penalties may apply. Each member is limited to $100,000 in any one or combination of Term Deposit Plus accounts. Fees may reduce earnings on account.
SMT1   |     |   Comment #50
Mak, #25. I was told by CSR that each account could not exceed $100,000, but multiple accounts could be opened up to $250,000. I was inquiring about the Term Deposit Plus accounts.
?   |     |   Comment #52
i would believe my seeing eyes instead of my lying ears
Mak   |     |   Comment #56
I've been though this before with them in the past and I myself got different answers but since I live near a branch I went in to try and find out... the manager called the main office and was told that $100k per primary member... for example.. I am a member, my wife is a member.... each good for $100k
Joe S
Joe S   |     |   Comment #27
Were these multiple Term Deposit PLUS accounts?
Joe S
Joe S   |     |   Comment #29
MAcd: Did you open multiple Term Deposit PLUS accounts?
Jennifer   |     |   Comment #6
Andrew, I recently faced the same issue as you in terms of having multiple Term Deposit Plus accounts at MACU. After reaching their "overflow" call center (where the staff don't seem trained to handle complex issues) I had to wait for a call back from a more highly trained staffer. Anyway, the told me that on the Term Deposit Plus CD's which have lower interest rates that they could stop the 10.00 per month deposit. However, the caveat is that if they stop the 10 per month deposit, after a month or two, their system will automatically relabel the account as a Term Deposit only (and drop the word "plus"). After that happens, you can keep the money in those lower paying CD's, but you won't ever be able to add anymore new money into them. Which of course is fine, since i had already opened higher paying Term Deposit Pluses for additional money.
I am just blabbering on with all those facts in case you wish to simply stop the 10 bucks a month into the lower paying CD's and then just "let them sit". I wouldn't break them and take an EWP unless it is beneficial to do that in the long term. Have you put your scenario into the CD break calculators on this site? It is located at the top under "banks" and then "banking calculators". You'll have that answer in minutes.
Jennifer   |     |   Comment #8
Of course it sounds like you don't have much money in those at lower rates anyway.
Andrew McCabe
Andrew McCabe   |     |   Comment #10
Only about $60-70 in each.
CCAring   |     |   Comment #35
Here is the calculatator you refer to.
Bowman   |     |   Comment #28
Why not just leave the lower rate ones, and then as each matures roll it into the highest yield deposit?
CCAring   |     |   Comment #33

This link will help you make up your mind.
Bennie   |     |   Comment #19
I did this less momths ago in anticpation of.lowrr rates. Just maintaining right now but have others coming due ober the next year or two
Bowman   |     |   Comment #30
Also just noticed the 2year at MACU was raised to 3.25%. Not bad to lock in.
deplorable 1
deplorable 1   |     |   Comment #2
They keep forecasting a economic slowdown but then we get new blowout jobs numbers. Then they say we have no inflation yet everyone is working and making more money. Something just isn't making sense here.
QED   |     |   Comment #16
It makes sense if you are able to remember the phony "massive recession" of 1991-1992.
#24 - This comment has been removed for violating our comment policy.
Andrew McCabe
Andrew McCabe   |     |   Comment #3
Is this the time to lock in long term CDs, or should we wait for competitive CD specials and purchase these when they come out?
Jennifer   |     |   Comment #9
In my opinion, i would lock yesterday. In December, i put huge amounts into Vanguard brokered CD's which were paying 4.12% yield to maturity at the time for 11 year terms. I am so happy i did that, because the brokered rates have now crashed. Who knows what will happen in the future. But i have been dealing with the low rates now for years and thought it a blessing that i could get 4.12% back in December.
Andrew McCabe
Andrew McCabe   |     |   Comment #11
Looks like you made a very good move. So, you would recommend locking everything into 5 year or longer CDs right now?
warren   |     |   Comment #15
Jennifer, what bank was offering 11 year term brokered CDs at Vanguard? I've never seen terms longer than 10 years offered.
RichardW   |     |   Comment #20
#15, HSBC Bank offers some new issue brokered CDs with a 13-year term. So if someone purchased an HSBC Bank 13-year term new issue brokered CD on the secondary market when it was 2 years past the new issue date, it would then be 11 years until it matured. Unfortunately most 13-year term HSBC Bank brokered CDs do not have call protection. This means HSBC Bank can call the CD and force redemption before the maturity date.
Jennifer   |     |   Comment #23
You've never seen terms longer than 10 years? I am referring to brokered CD's on the secondary market (not new issues). In December there were maturities going all the way out to 2048!
I actually bought one 2048 maturity CD for a tiny amount, Bankwest. Anyway, there were many options for maturities in 2029, 2030, 2031 and beyond. I purely focused on the 2029 to 2031 range (BMO, HSBC, Wells). Everything I bought was at a discount (so you get to pocket a lot of extra money "up front" but then have a lower interest/coupon rate till maturity; however, the yield to maturity came out to around 4.12% or I think some were 4.25% but those were purchased way back in early December). Anyway, the market has really gone down since then (secondary mkt I mean).
My maid actually taught me how to do all of this! She has a finance degree from another country from a discredited university that is useless here (long story!!).
I adore the secondary market.
warren   |     |   Comment #32
Jennifer, interesting information, I didn't know they had brokered CDs with maturities out as far as 2048! Did the BMO, HSBC, & Wells Fargo CDs that you obtained have unique features? For example: did they not have call protection, or maybe were their rates not fixed for the duration of the CD's term?
Jennifer   |     |   Comment #42
Some of them are callable and some are not. Some have a "step up" coupon/interest rate that progresses in future years (unless called). However, none of them are callable right away. Actually one is callable next year but it won't really be called because the coupon interest rate is only 2.0% despite my YTM of 4.12% as it was bought at a discount. And it doesn't matter much anyway, because i checked the Yield to Worst on all of them before purchasing and the Yield to Worst percentage was the same as the Yield to Maturity.
RichardW   |     |   Comment #69
Jennifer, I’m puzzled by what you said in comment #42. You stated: “i checked the Yield to Worst on all of them before purchasing and the Yield to Worst percentage was the same as the Yield to Maturity.” How is that possible? You said the collection of CDs you purchased was composed of some callable CDs (some of which were “step-up”) and some non-callable CDs. However, by definition, callable CDs can never have YTW% = YTM% since the call date is a different date than the maturity date. Did I misinterpret your comment?
RichardW   |     |   Comment #70
Jennifer, ignore my previous comment (#69). It looks like I'm wrong, or at least my Fidelity trade screen indicates that I'm wrong. Several of their callable, secondary issue, brokered CDs are listed with YTW% = YTM%
NCSaver   |     |   Comment #36
Jennifer, I was fortunate to lock into some of the 5 year 4% CD deals at the end of last year (thanks to the great info here on DA) - but now I have concerns that when they mature, rates will be lower. I have never purchased brokered CDs on the secondary market but now wish I had been looking at these as well (you did great!). How do you go about this? I assume that first, you need an account with Vanguard or Fidelity (does Schwab also offer these)? How do you research and then purchase these CDs? Are they FDIC insured? Forgive my ignorance here... it's just a new area that I have not explored and therefore don't really understand.
warren   |     |   Comment #38
#36, Here is an older depositaccounts.com article which gives some good basic background information on brokered CDs: https://www.depositaccounts.com/blog/notes-personal-ira-cd-investing-longtime-reader-2.html
Jennifer   |     |   Comment #43
Yes. You need a brokerage account (you can also purchase them within an IRA account at a brokerage firm). Also, be aware that the secondary CD inventory you find on the brokerage websites varies greatly from brokerage to brokerage at a given moment in time. For example, I was checking on both Fidelity and Vanguard. I purchased a few at Fidelity for 4% that are actually going to be callable in 12 months. But the YTM and YTW were both 4%. However, the deals I found for greater than 4% weren't even listed at Fidelity. However, Vanguard had a massive inventory of them (back in early December). I think a lot of investors skip right over these secondary issues when they see the horribly low coupon rates of 2%, etc and they don't really take the time to examine the yield to maturity and yield to worst and the fact that it will be purchased at a deep discount to the actual redeemable value at the maturity or when called.
SMT1   |     |   Comment #48
NCSaver #36. Schwab does offer a secondary market for CD's as well as Treasury bonds and bills. I currently use my Schwab brokerage account like a bank savings account where funds can be wired quickly when a great CD special is offered at a Credit Union or Bank. I typically purchase 3 month T-bills, currently yielding about 2.45%. There are no State taxes with Treasuries, so in my state, the yield is comparable to a 2.65% savings account. Since it is the secondary market CD's or Treasuries can be sold immediately with 1 day to settle into cash that can be wired usually within an hour (no fee) directly to the other institution with the great CD special. With a 3 month Treasury there is little risk of a big change in market value should rates decline or increase.

For your purposes, brokered CD's are at [email protected]% and [email protected]%, so you're currently better off with direct CDs with the CU's and Banks. Longer term treasuries suck with [email protected]% and [email protected]%. Even after calculating in the lack of State taxes they still don't compare to 3.5% CDs at CU's and Banks.
NCSaver   |     |   Comment #67
Jennifer, Warren, and SMT1 - thanks for this great information. The article was especially helpful, as was the information on the strategy to use your brokerage account as a place to "house" cash (in secondary market CDs or short term treasuries) while waiting for CD deals. I had thought about utilizing a "Rewards Checking Account" (like the one at Orion) for that purpose since the yield is better than most savings accounts, but the electronic transfer capabilities are limited (I think you can only transfer up to $2500 per day). I have a bit to learn about YTM and YTW - but will do some homework on these. I appreciate the helpful information!
DOA   |     |   Comment #72
Good information from some knowledge on brokerage certificate of deposits.
That Yield To Worst (YTW) on a callable cd is just exactly what it says. At time of purchase, it is the worst given yield you could possibly receive at any given period of time if the cd was called and liquidated before the final maturity date. If you shop for brokerage certificates, my experience has been that you normally find the better rates on Tuesday and Wednesday of the week. Fridays, for the most part, are the worst time to find the better rates. On those secondary issues, just be sure you understand how to report those taxes on them.
warren   |     |   Comment #66
NCSaver #36, In addition to the depositaccounts.com article I listed in my earlier comment, you may also want to check out the following articles for more background information regarding brokered CDs:
https://www raymondjames.com/wealth-management/advice-products-and-services/investment-solutions/fixed-income/taxable-bonds/brokered-certificates-of-deposits-cds
warren   |     |   Comment #68
It looks like I provided some invalid links for the last two websites in comment #66. Let's try this one more time: https://www.bankrate.com/finance/investing/bank-cds-versus-brokered-cds.aspx
Jean   |     |   Comment #12
365 day EWP.

Why not just buy the regular 5yr cd @3.51%, and no maximum. I also like the 3yr @3.35%. 180 day EWP.

Ok, now the bad. A comment said your application has to ne notarized? And no ACH? That true? See the bank review.
Andrew McCabe
Andrew McCabe   |     |   Comment #14
How about the State Bank of India Senior Citizens 5 year at 3.56%?
SMT1   |     |   Comment #51
I was told that the regular 5yr also has a 360 EWP. The only trade-off for not being able to add additional funds later like the Plus account is that you do not have to have the $10 deposit each month.
Bill Barr
Bill Barr   |     |   Comment #17
What is the best deal available right now?
Bill Barr
Bill Barr   |     |   Comment #18
Is the best deal available the 6month CD at Andrews paying 3.25%APY?
SMT1   |     |   Comment #21
Bill Barr #18. Andrews [email protected]% is a great deal but depends where rates are in 6mos and how much funds you have to invest. With somewhat limited funds and the current forecast, it may be best to lock in [email protected]% range. If the Fed stays at current levels, and Bank loan demand weakens, as Ken pointed out, 5yr CD's may likely be less than 3.5% in 6mos. If you have a higher amount of funds to invest, it may be worth it to hedge/diversify with short, mid and long range maturities. Personally, I am diversified and will be grabbing some Andrews 6mos, but I will also be looking to commit more funds to [email protected]% while they last. Fortunately, I grabbed nearly all the 4% or higher deals in 2018 when folks were thinking 5% was coming, and I'm glad I did. Yes, there was Keesler's short maturity [email protected]% which I and many others jumped on. But Keesler got everyone excited into thinking 5% was going to be more prevalent and ultimately was a disservice to many, causing them to pass up the very limited number of 4 percenter's that popped up briefly then vanished in 2018. I would feel much worse missing the 3.5 percenters should rates decline than being stuck in the 3.5 percenters should rates go up. Diversify.
#26 - This comment has been removed for violating our comment policy.
gregk   |     |   Comment #31
Not a strong analysis this week, - no nuance, no real insight.

Speaking for myself, I find no value in either the "Fed Funds Futures' or (especially) the average CD rates graphs. I myself don't care about averages but only about what the rate leaders are offering, and as for the "Futures" I believe it reflects nothing more than the wishes of stock market investors.
Simms   |     |   Comment #34
It is very simple, the FED will be nationalized and the treasury will issue bonds and print money. In that environment. everyone wins (the treasury will collect and pay interest on the bonds and borrowed funds, not the FED (globalists)), but we need to help Trump to succeed.
If the Latin invasion continues, we do not stand a chance for the future.

gregk   |     |   Comment #37
"It is very simple" always makes me very suspicious.
Joe S
Joe S   |     |   Comment #39
Should we lock in the 5 year CD at Mountain America?
Jennifer   |     |   Comment #44
If you have 5 bucks to open a Mountain America Term Deposit Plus CD and are willing to do the automatic monthly 10 buck contributions then why not? You will be locking in the interest rate, just in case you wish to add more at any point during the 5 year term. Or if you know you want to keep the money there the entire term, i suppose you could skip the "plus" and just do their regular term deposit product that doesn't allow add ons.
SMT1   |     |   Comment #53
Jennifer #44. Nice work bringing MACU to everyone's attention in this thread. I remember seeing this a while ago but thought it was just a local deal. After seeing your post I noticed that it was open to members of the American Consumer Council. Ironically, the ACC never came up during my verification online or over the phone, so they appear to be open nationwide to anyone. My problem with setting up accounts with them is that they wanted a picture of my social security card which I have not had in probably decades. I haven't missed not having it until now, but am going to go thru the process to get another one anyway. Not a big deal if I miss this, but I do like the option to lock in a market rate now with not having to fund it fully. Gives lots of options
Andrew McCabe
Andrew McCabe   |     |   Comment #54
What is your opinion of the 5 year regular term deposit product?
Andrew McCabe
Andrew McCabe   |     |   Comment #63
Do you prefer the 5 year Bank of India Senior Citizen CDs, or the Mountain America 5 year CDs?
chose it
chose it   |     |   Comment #64
if your not a senior citizen You have a choice
SMT1   |     |   Comment #71
Andrew #63 If you are 60+ India has a slightly higher rate and 270 EWP vs MACU's 360 EWP.

Personally, I think MACU's 5-year Term Plus offer is awesome for providing rate insurance 5 years out without having to fund other than $5. It is a great back-up insurance plan for those that believe they may still be able to land a higher rate in the months ahead.
Joe S
Joe S   |     |   Comment #40
I agree there was no insight. And this is when we really need it.
#41 - This comment has been removed for violating our comment policy.
111   |     |   Comment #46
"Bozo Indicator" - I know you're making fun here, but VMMXX is down again by 1 basis point (yesterday or today), as are brokered CD rates and a few other other indices or trends. So there's at least SOME correlation...
Bozo Indicator
Bozo Indicator   |     |   Comment #47
111, of course there is correlation, which is a silly word, because money market funds are, in fact, fixed income so the rates are not "related" to market interest rates, they are market interest rates.

The point is, the Bozo Indicator PREDICTS future interest rate, not simply correlate.
Jennifer   |     |   Comment #45
The only person who could give insight is a seer or psychic. Otherwise it is pure speculation.
Jim Comey
Jim Comey   |     |   Comment #55
Informed insight is valuable. It doesn't matter that it may be incorrect.
Milty   |     |   Comment #49
Pause rates and preserve QE . . . this irrational patience does not bode well for savers. Is another major recession really just right around the corner?
long haul
long haul   |     |   Comment #57
I better grab the Discover cd. 10 years 3.10%.
The Prophet
The Prophet   |     |   Comment #58
My guess is what we're facing is a sequence of crises, after each of which the Fed and the Government furiously try to patch things up (though not address the underlying problems which is politically unpalatable), but less and less effectively, until we finally collapse into a sea of upheaval and unrest that will shuffle the deck irrevocably and result in a re-orientation utterly unpredictable in its arrangements and direction.
Deep Thoughts
Deep Thoughts   |     |   Comment #59
Goodness gracious! Is this true?
Whiskey Breath
Whiskey Breath   |     |   Comment #60
The Prophet had better lay off the Jim Beam before posting!
SMT1   |     |   Comment #61
Too funny and most likely a correct Phrophesy!
111   |     |   Comment #65
Whoa! Didn't I read that in about 23 of the 23 post-apocalyptic novels I read last year? (And by the way, doesn't that suggest that a buying opportunity is near?)
deplorable 1
deplorable 1   |     |   Comment #73
Some folks on here are locking up funds in 10 year plus CD's at 3.5%. A lot can happen in 10 years and there could be multiple CD specials along the way of 4,5,6%. Not to mention bank bonuses and CD type annuities. I would just caution folks not to lock up the majority of their cash for such a long period of time. Even I don't try to make any predictions out past a year or so as there are too many variables to consider.
SMT1   |     |   Comment #74
Deplorable1 #73. I'll second that, with the caveat that locking up only a portion of your funds for 10 years is a reasonable strategy, maybe 10-20%. Also keeping a portion in 5yr, mid maturities, short maturities and high yield Savings that can be deployed when great deals come up.
deplorable 1
deplorable 1   |     |   Comment #76
I agree locking up a portion of your money long term is prudent. It just seemed like some folks have been in a rush to lock up everything. I'm sure nobody wants to get caught in 0% 8 year vacuum twice which is understandable.
Brokered   |     |   Comment #75
Be careful in your assumptions. We have $400K maturing in just under 5 years. The last thing I need is more money to worry about five years from now so we recently put $380K in 10-yr 3.65% CD's. Also, each year we have another $80-$100K to "invest" somewhere or leave wallowing in the bank. In two years we have another $150K maturing at PenFed so that year will also be challenging. Every situation is different so beware of generalizations.

As an aside, I had a married friend with a good family income who complained he was broke at the end of every month. After about a year I asked a few questions and found out why. After expenses were paid they put $2K a month into an investment account. So, on top of two jobs with good pensions down the road they were putting $24,000 after-tax dollars into an investment account each year. Then they told their friends they were broke each month! I laughed thinking it was probably a good way to think about money. Out of sight, out of mind. When retirement rolled around they never once complained about being broke each month.
Milty   |     |   Comment #77
Ah, the banks only made a paltry $236 billion in profits last year. Shame on us savers for trying to put these fledgling companies out of business by grasping at bonuses and wishing for higher rates. (Also tiaa bank cut their rates today . . . )
Brokered   |     |   Comment #78
Which is a good thing!
"No bank failed in 2018, marking the first time that has happened since 2006, a year before the start of the financial crisis."
Federal Reserve, the Economy and CD Rate Forecast - Feb 12, 2019

There were more signs in the last week that the Fed won’t be raising rates anytime soon. In recent speeches, Fed Chair Jerome Powell and other Fed officials have suggested that the Fed will be exercising patience in the first half of this year. As economist Tim Duy described in his latest Fed Watch blog post:

The best chance we have for a rate hike in the second half of this year is if the economic data surprises on the upside. In the speeches, the Fed officials have been optimistic about...

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Federal Reserve, the Economy and CD Rate Forecast - Feb 5, 2019

After last week’s Fed meeting, it appears the December Fed rate hike may be the last one for this rate hike cycle. It’s possible that if the economic data surprises on the upside, the Fed could do another rate hike later this year. However, the odds of this doesn’t look promising.

Economist Tim Duy gave his review of last week’s Fed meeting in his Fed Watch blog post, “Setting the Doves Free”. In the review, Tim Duy said:

Recent economic data has been stronger than expected. In particular, the January jobs report...

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Federal Reserve, the Economy and CD Rate Forecast - Jan 29, 2019

This is my new weekly review of the Fed, the economy and what we can expect of future deposit rates. This 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. This change was done to separate the economic and political discussion from the deal discussion. Often economic discussion leads to political discussion, and that can create lots of comments which drown out...

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Federal Reserve, the Economy and CD Rate Forecast - Jan 22, 2019

This is my new weekly review of the Fed, the economy and what we can expect of future deposit rates. This 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. This change was done to separate the economic and political discussion from the deal discussion. Often economic discussion leads to political discussion, and that can create lots of comments which drown out...

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Federal Reserve, the Economy and CD Rate Forecast - Jan 15, 2019

This is my new weekly review of the Fed, the economy and what we can expect of future deposit rates. This 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. This change was done to separate the economic and political discussion from the deal discussion. Often economic discussion leads to political discussion, and that can create lots of comments which drown out...

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