The missile strike on a Malaysian airliner in Ukraine and the invasion of Gaza by the Israeli military sent a jolt through the financial markets this past week. Geopolitical tensions impacted the interest rate markets and the stock markets as one might expect the events unfolded along the Ukraine – Russian border and the Middle East. The immediate impact to the markets included a quick drop in interest rates and the stock market.
While the world events brought a cautionary tone to the markets, the impact was relatively short lived and brought only modest changes to the U.S. financial markets. During the week, the S&P 500 made its biggest one day drop in three months. The news also pushed the benchmark 10 year US Treasury bond to the bottom of its recent trading range at 2.47%. By Friday, the stock market had rebounded to where it was prior to the tragedies and the bond markets had made a moderate bounce back up with only slight interest rate reductions by week’s end.
The relatively modest and short term impact on the markets is likely a result of market analysis regarding the chance of escalating tensions as opposed to the actual severity of the current state of affairs. The problems in Gaza and the Russia’s intervention in Ukraine are certainly significant problems resulting in 100’s of deaths but, the market appears to view these events as unlikely to escalate further or spread to neighboring regions.
What now seems lost on the interest rate markets was testimony by Fed Chair Janet Yellen just two days prior to the devastating events in the Middle East and Eastern Europe. Fed Chair Janet Yellen provided her semi-annual testimony to the Senate Banking Committee on Wednesday during which she emphasized that uncertainty over the economic outlook remains the first and foremost concerns of the Fed as it formulates interest rate policies and monetary intervention.
However, the Chairwoman added, “If the labor market continues to improve more quickly than anticipated by the Federal Open Market Committee, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target likely would occur sooner and be more rapid than currently envisioned,”.
For more results on the impact worlds events and Fed testimony had on bank rates and the interest rate markets, please review the data summaries which the attached table presented below.
The SelectCDrates.com weekly bank rate survey provides a detailed report on bank savings rates and lending rates by different consumer rate categories. The current bank rate survey is for the week ending July 18, 2014 with rates obtained on or after that day. The weekly rate survey presented the following interest rates and their changes for mortgage rates, CD interest rates, credit card rates, money market rates, savings account rates and Treasury rates:
Bank Rates Market Recap with the Weekly Change in Rates Offered for July 18, 2014
CD interest rates:
Composite CD interest rate index 1.111 percent (down .004 percent)
3 month CD rates 0.402 percent (unchanged)
6 month CD rates 0.747 percent (unchanged)
1 year CD rates 1.051 percent (down .011 percent)
2 year CD rates 1.198 percent (down .01 percent)
5 year CD rates 2.156 percent (unchanged)
Money market and savings account rates:
Bank money market rates and savings account rates 0.897 percent (unchanged)
30 year mortgage rates 4.180 percent (down .016 percent)
15 year mortgage rates 3.348 percent (down .001 percent)
20 year mortgage rates 3.920 percent (down .033 percent)
30 year jumbo mortgage rates 4.115 percent (up .025 percent)
30 year FHA mortgage rates 3.970 percent (unchanged)
Credit card rates:
Credit card rates for new credit card offers 13.87 percent (unchanged)
US Treasury rates:
Six month Treasury rate 0.02 percent (down .02 percent)
One year Treasury rate 0.10 percent (down .01 percent)
Two year Treasury rate 0.51 percent (up .03 percent)
Five year Treasury rate 1.69 percent (up .04 percent)
Ten year Treasury rate 2.50 percent (down .03 percent)
All bank savings rates and lending rates are based on surveys conducted by SelectCDrates.com at the close of July 18, 2014 with all of the interest rates obtained directly from the banks within the SelectCDrates.com survey. Treasury rates are obtained directly from the Department of the Treasury.
For more detailed interest rate data on mortgage rates, CD rates, credit card rates and savings account rates for the week ending July 18, 2014 please see: 3 month CD rates, 6 month CD rates, 9 month CD rates, 1 year CD rates, 2 year CD rates, 4 year CD rates, 5 year CD rates, 30 year mortgage rates, 15 year mortgage rates, FHA mortgage rates, 20 year mortgage rates, 10 year mortgage rates, jumbo mortgage rates, VA mortgage rates, best interest checking accounts and best credit card rates.