This week’s numbers for bank rates, CD rates, mortgage rates and credit card rates were down across the board. Weak economic conditions continue to keep bank rates at historic low levels. While the economy searches for direction and more importantly, signs of sustainable growth, demand for safe and secure fixed income securities has risen.
The rise in mortgage backed securities prices and Treasury prices have pushed rates lower on those investments. Low Treasury rates combined with an abundance of excess reserves have kept bank savings rates including money market rates and CD interest rates low.
Bank CD rates were down once again, on average, for the week ending July 16, 2010. The composite CD interest rate index compiled by Selectcdrates.com ended the week at 1.674% which is down from 1.82% in the previous week. The composite CD interest rate compiles the average rate of the ten best CD rates for the 3 month term CDs, 6 month term CDs, 1 year, 2 year and 5 year CDs.
The average 30 year mortgage rate and 15 year mortgage rate were also lower on the week. The average 30 year mortgage rate from the top ten bank mortgage lenders shifted down to 4.70% with .363 points while the 15 year mortgage rate moved down to 4.137% with .363 points.
Credit card rates, which have had a bumpy ride this year, managed to move lower as well by the close of the week. The average rate on new credit card offers based on the Selectcdrates.com credit card index was down by three basis points or 3/100’s of a percent. The average rate for new credit cards, excluding introductory credit card rates, came in at 13.54% down from the previous week’s average rate of 13.57%.
The past week Treasury rates also moved lower across a broad spectrum of maturities with the longer term 10 year experiencing the greatest reduction in yield. The ten year Treasury rate ended the week with a yield of 2.96% after starting the week with the rate at 3.07%.
The Fed minutes clearly indicated they Fed’s concern for a continued weak economy. The Fed added terms of optimism but the forecast stated, “While the recent data on production and spending were broadly in line with the staff’s expectations, the pace of the expansion over the next year and a half was expected to be somewhat slower than previously predicted.” The Fed minutes went on, “most participants revised down slightly their outlook for economic growth, and about one-half of the participants judged the balance of risks to growth as having moved to the downside.”
Clearly, the Fed is concerned about the prospects for economic growth and is now projecting that it will take some time for the economy to return to normal levels of growth. This report is far more negative than most financial soothsayers have reported on. Good news for home loan borrowers and credit card shoppers, bad news for investors in bank CD rates and fixed income securities.
Tags: 30 year mortgage rate, bank CD rates, bank rates, bank savings rates, best CD rates, CD interest rates, CD rates, credit card rates, money market rates, mortgage rates, new credit card, treasury rates
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