The Stock Market continues to struggle with the credit crisis. Back in October the market was setting new highs. The DOW climbed to 14,280. It closed at 12,799 on November 21. It rebounded above 13,000 a couple of days ago. Treasury prices continue to rise and the yields fall. Prices and Yields move inversely from each other. The 2-year slipped below 3%,l yes below 3%. The 10-year was as high as 4.60% in October and now sits at 4.02%. It briefly slipped below 4% November 21. The 10-year is currently at 3.93%.
The markets sure think the Fed may have a rate cut or two left in them. For CDs, high 6-month and 1-year rates are just above 5%. On the long-term, most are barely pushing 4.90%. If the Fed cuts the overnight rate, CD rates will fall further. The question becomes how far and for how long will they stay down. We track economic news on our CD Rates Blog
It is best to take a balanced approach to any investing. When it comes to CDs, it is important to create a ladder so that you can take advantage of rates if they rise, but you are also protected if they go down or hold. It is also important to keep a certain amount in cash accounts so that you don't have to break your CDs early. Early withdrawal penalties can be high.
We track rates on our CD Rates website.
ChrisCD -- Jumbo CD Investments, Inc.
