The Z Reviews

It has been another down week for bonds. As the stock market has been rallying (although, I’m not really sure why?), Bond prices have fallen and yields risen (bond prices and yields have an inverse relationship). This happend in June as well. Last month, some bank CD yields increased, but that hasn’t really materialized here in July.

The best online 1-year interest rates are in the 2.50% range. Good rates are in the 2.00% to 2.25% range. The curve is fairly flat on terms of 1-year to 3-year. There is usually a tiny uptick for going to a 2-years CD. Most 2-year CD rates are about 0.25% above than the 1-year, and the 3-year is usually another 0.25% higher that, around 2.75%. Good 5-year rates are near 3.40 to 3.60% APY.

Typing the year and rate will produce some interesting rate data. This usually brings up a list of web pages with current online rates. And if, for instance, you are attempting to find the hard to find 3%, you’ll probably find it within the highest twenty or so pages. You can also search by state. For example, you could type cd rates nj for rates in NJ – New Jersey

Over the next few months, the stock market and bond market will probably continue this annoying give and take. Since the banks also know it is a back and forth, give and take, they probably won’t respond with increased online CD Rates. I think it will take the FOMC to increase Fed Funds to drastically change CD rates. It may be 9-months before that happens. Keep in mind that short-term yields will probably increase speedier than longer-term rates, eventually leaving us with a flat or nearly flat yield curve. If at some point the curve inverts again (as it did in 2006/2007), I would lengthen your terms on your certificates. Lower rates are usually just around the corner from an inverted curve. But, I think we are in for a drawn-out time of low rates. The economy isn’t improving. Everytime talking heads discuss a greenshoot, indicators comes out that it in reality was a brownout.

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