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Normalizing Yield Curve & Impact On LT CD’S

CDMD
  |     |   141 posts since 2022

I am surprised there is little discussion on this forum of the normalizing yield curve with the 10 treasury at or heading to 4.5-5.0 % and the impact that will have on longer term Cd rates like a 5 year cd. With Fed Funds heading to low 3s and a normal spread of 140+ bps we should see soon higher long term cd rates. Certainly the stock market success will draw funds from bonds also putting pressure on longer term rates. The mortgage market is showing no let down on loan rates and financials are going to want to fund the long term fixed mortgages with longer term CDs I think this bodes well for long term savers in a falling fed funds market

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Rickny
  |     |   1,296 posts since 2017
As rates go down, the financial institutions will want to lock people into long term products. When rates went up most long term CDs were paying less than short and medium term products..
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CDMD
  |     |   141 posts since 2022
True but Treasury yields will put a stain on cd funding costs as competition for where savers could go. Limiting availability with upward pressure on FIs
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6


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