As of 12 pm ET 02/07/2025, here are the highest rates at either Charles Schwab brokerage and/or Vanguard brokerage for non-callable, new-issue brokered CDs with terms of 3-month, 6-month, 9-month, 1-year, 18-month, 2-year, 3-year, 4-year, and 5-year:
3-month: 4.35% (Five Star Bank CA sold out), 4.30% (Beal Bank TX, Beal Bank USA NV, Enterprise Bank & Trust Company MA, Open Bank CA – monthly)
6-month: 4.25% (BofA, Enterprise Bank & Trust Company MA, Enterprise Bank & Trust MO - monthly, GSB, Meadows Bank NV, Merrick Bank UT - monthly)
9-month: 4.25% (all sold out), 4.20% (BofA, Royal Business Bank CA -monthly, Meadows Bank NV, Merrick Bank UT – monthly, Needham Bank MA)
1-year: 4.25% (GSB, State Bank of India IL)
18-month: 4.25% (all sold out), 4.20% (BofA, Merrick Bank UT – monthly, MSB, MSPB)
2-year: 4.30% (EagleBank MD – monthly sold out, Merrick Bank UT – monthly, MSB, MSPB)
3-year: 4.30% (EagleBank MD – monthly sold out, Merrick Bank UT – monthly sold out), 4.25% (AMEX, Merrick Bank UT -monthly, Texas Exchange Bank TX -monthly, MSB, MSPB)
4-year: 4.25% (MSB, MSPB, Texas Exchange Bank TX - monthly)
5-year: 4.30% (EagleBank MD – monthly sold out), 4.25% (Amex, MSB, MSPB)
Large issuers abbreviations:
AMEX=> American Express National Bank, UT; BofA => Bank of America NA, NC;
GSB => Goldman Sachs Bank USA, NY;
MSB => Morgan Stanley Bank, UT; MSPB => Morgan Stanley Private Bank, NY;
SCHW => Charles Schwab Bank, TX; UBS => UBS Bank USA, UT; WF=> Wells Fargo Bank, SD.
Notes: For those staying liquid, here are the previous ten, including from yesterday, weekly 4-week T-bill auctions most recently yielding investment rates: 4.323%, 4.323%, 4.339%, 4.313%, 4.318%, 4.339%, 4.334%, 4.303%, 4.313%, 4.476%.
Current Money Market yields as of 02/06/25 at Vanguard are (VMFXX (Settlement fund) 4.28%, VUSXX (Treasury) 4.26%, VMRXX (Cash Reserves Admiral) 4.29%). Vanguard has reduced their expense ratio fee on VUSXX from .09% to .07%.
EagleBank MD, was offered only at Charles Schwab brokerage, not Vanguard brokerage, 4.30% payable monthly at 2-year, 3-year and 5-year terms. Merrick Bank UT offered only at Charles Schwab brokerage, not Vanguard brokerage, 4.30% payable monthly at 2-year, 3-year terms. Merrick Bank UT reduced their offering on Friday 2/7/25 to 4.25% payable monthly on 3-year term.
As of February 5, 2025, ICI reported to the Federal Reserve that $6.92 trillion of cash is parked in money market funds. This is an increase of $44.18 billion from the prior week.
It could be that both the 50 basis point cut Sept 18 and the 25 basis point cut Nov 7 have already filtered through the economy. Only the 25 basis point cut Dec 18 has not yet filtered. And of course that is monetary policy. We have no certainty how fiscal policy will affect inflation, expectations.
National Economic Council Director, Kevin Hassett, on today’s Bloomberg interview, emphasized the importance of reciprocity on tariffs, taxes. We know this could indicate increases in coming tariffs, especially on Europe. Chief Economist at Apollo, Torsten Slok, believes “deglobalization is inflationary by definition, and that we could get an inflation boost of ½ of a percent from the coming trade tariff war.” US Treasury Secretary, Scott Bessent, indicated his focus is on the 10-year price, to get the yield curve down.
With today’s unemployment rate dropping to 4.0%, average hourly earnings rising by ½ of a percent, 1-year inflation expectations rising to 4.3%, immigration decreasing, coming increases on tariffs, and uncertainty about tax cuts policy, that inflation expectations could be anchoring. With today’s job news and tariffs expectations, the yield on 10-year Treasuries advanced to 4.49%. All of this would indicate that for the near term, it is likely the Fed will continue to be on hold and wait-and-see mode with interest rates.