When are CD rates expected to rise? (funds, pay, rate)

[md21722]

Can anyone estimate when CD rates are expected to rise?

As Rewards Checking account rates continue to fall, long term CD are looking more attractive, but I wouldn't mind taking a lower Rewards Checking account rate short term if CD rates are going to raise anytime soon.

[mathjak107]

no one knows.. the economy and unemployment are still in the toilet .

rates are where they are because they have to be.

[Pitt Chick]

Originally Posted by md21722

Can anyone estimate when CD rates are expected to rise?

Probably 6 to 12 months after mortgage interest increases.

[michgc]

One day after you lock in a 5-year rate.

[las vegas drunk]

Originally Posted by md21722

Can anyone estimate when CD rates are expected to rise?

As Rewards Checking account rates continue to fall, long term CD are looking more attractive, but I wouldn't mind taking a lower Rewards Checking account rate short term if CD rates are going to raise anytime soon.

The Federal Reserve has said they are going to keep interest rates near zero until at least 2014, so you have at least 2 years before they could rise.

[md21722]

LOL! At this point I'm wondering if I should lock in a 5-year rate rather than see rates slip even more. I figure even with a 6-month interest penalty its still 1% for that year.

[tickyul]

Your return on CDs will be next to zero for at least three more years. The Fed is jacking money into the economy................CHEAP/FREE MONEY................and wah-lah, the banks have NO need to pay you for your crummy deposits/cd.

The Stock market is running up and up and up mainly due to this fact......investment money needs to make SOMETHING...............CDs/MM and thingees like that do not cut it.

[texdav]

When the FEd allows in rates to rise and stops keepig them low by policy.Right now they say after 2013 alho some Fed memebrs disagree more and more with Berannke.I suspect with the hram its doign to middle class wealth it can't go o too much longer without dire consequences with bommers on fixed income.

[jtur88]

For what reason should they rise? The rich, who control the rates, are getting richer as they are. If it ain't broke, don't fix it.

[mathjak107]

Ha ha ha , if thats what you think the reason is just keep believing it.

for the rest of us we will go with what happened in 1929 when they tightened money policy in error.

here is a simple explanation

Bernanke highlighted several key Fed mistakes:

•The Fed began raising the Fed Funds rate in the spring of 1928, and kept raising it through a recession that began in August 1929. This led to the stock market crash in October 1929.
•When the stock market crashed, investors turned to the currency markets. At that time, dollars were backed by gold held by the U.S. Government. Speculators began selling dollars for gold in September 1931, which caused a run on the dollar.
•The Fed raised interest rates again to preserve the value of the dollar. This further restricted the availability of money for businesses, causing more bankruptcies.

•The Fed did not increase the supply of money to combat deflation.
• As investors withdrew all their dollars from banks, the banks failed, causing more panic. The Fed ignored the banks' plight, thus destroying any remaining consumers’ confidence in banks. Most people withdrew their cash and put it under the mattress, which further decreased the money supply.

Bottom line...thanks to the Fed, there was just not enough money in circulation to get the economy going again. Instead of pumping money into the economy, and increasing the money supply, the Fed allowed the money supply to fall 30%.