I wonder what the 2024 CD Rates will be. I expect that the rate will drop to 3.75% by the end of Q1 2024 if the Fed\s rate increases result in a lower inflation rate. Anybody have any thoughts on this issue?
Answers
One thing we do know for certain about Q1 2024: Either Biden or Harris will be POTUS. And that's a pick'em situation in my view, as regards your question. You could see with this past week's SCOTUS decisions, and the heated reaction to them, the current executive branch vote buying strategy will proceed unabated to the extent possible. And that mitigates in favor of support for existing or even higher interest rates.
On the legislative side, pretty much ditto regardless political party. The Democrats will spend as much as they can, as always. The Republicans are close to being as bad. The recent debt ceiling agreement between McCarthy and Biden, a joke, merely paved the way for still more spending until after next year's election. And you only asked about Q1. I expect by then the spending will be nothing short of robust and energetic. Once again, this anticipated situation will be supportive of steady or higher interest rates.
A word for those who believe flagging jobs creation will move things in direction opposite to the above speculation:
Neither has happened yet. I posted about the June jobs report earlier today. Jobs have been very strong and of course that strength will not last forever. But my guess, my prognosis (and what the hen, this whole post is a big fat guess), favors stagflation over recession if it comes down to one or the other. And I don't associate lower interest rates with stagflation.
Bottom line: anything can happen, and very few individuals have a crystal ball.
My "inflation buster" CD matured today. I went into it seven months ago worried interest rates would be down by now, leaving me with a problem re-investing the money. How wrong was that!!
So what to do in the interim ? - I've bought several CD's the past year. Last one was 48 month at GTE at 5.12%, and just before that 60 month at Freedom at 4.95%. Highest were 3 bought at Mobility CU back in February at 5.65%. Lowest was 36 month at Freedom at 4.08% back in September. Happy with the average rate. Have another at 3.6% maturing in Febr of 2024. Hopefully the rates will hold till then. Holding some dry powder in MMA for now . Trying to decide whether to pounce on that 60 month at Advancial paying 5.14%. Lower now than money market but for long term - we may not see 5% again for long term rates in this cycle. Need that crystal ball - who knows what the future holds ? Every opinion is nothing but a guess.
I have always had good service with Advancial. Whether over the phone or in person in the local branch. I've had 3 CDs and a Money Market account with them over the years - no issues whatsoever. Would not hesitate to use them again. That's just me - others may have different experiences. For now - I am good with Advancial.
Thanks for the reply. I think I will go ahead and give the 5.14% 5 year CD at Advancial a try later this week
This is an item which first appeared in the NY Times earlier today. The writer is economist Paul Krugman. Both the Times and Krugman are well established left wing advocates and sources. Krugman appears to be making a case for lower interest rates going forward.
https://dnyuz.com/2023/07/03/can-biden-change-the-economic-narrative/
The above link gets you past the NY Times paywall.
https://dnyuz.com/2023/07/04/the-pain-is-just-starting-for-commercial-real-estate-and-plunging-prices-could-reignite-the-banking-crisis-and-choke-the-us-economy-columbia-professor-says/
As I posted back on July first, nobody knows where interest rates are headed . . . . but I suppose many of us have an opinion.
As for commercial real estate:
Yes, it is under great pressure. I posted about this prior on another thread. The pandemic was an agent of change. Many people continue to work from home and the skyscrapers contain significantly fewer people than was the case before the pandemic.