The week ending July 31, 2009 saw the best CD rates offered by banks available nationally continue to push lower.  This week failed to end the current slump in certificate of deposit yields that started in early spring.  All bank CD terms evaluated from the top ten best bank rates were down for the week with the exception of the five year CD rates which remained unchanged.

The average for the best 6 month CD rates fell one basis points or 1/100 of a percent for the week to close at 1.77%.  The best CD rates with a one year term dropped by two basis points, landing at 2.08%.  Two year CD rates matched the movement of the one year CDs and moved lower by two basis points to 2.36%.  The best five year CD rates held steady with an average rate of 3.41%.

While bank CD rates continued their prolonged down trend this week, Treasury rates were mostly unmoved with the exception of the long term bonds.  Three month Treasuries ended the week right where they started at .18%.  The six month Treasuries were lower by three basis points, falling from a close of .29% on July 24 to .26% on July 31.  The one year Treasury note moved up one basis point to rest at .48%.  The ten year Treasury plummeted, tumbling from 3.70% the previous Friday to 3.52% on Friday July 31. July was a crazy month for Treasury rates.  Ten year Treasury bonds moved between a low of 3.32% to a high of 3.75%, a variation of 43 basis points in one month.

The average for the best 6 month CD rates fell one basis points or 1/100 of a percent for the week to close at 1.77%.  The best CD rates with a one year term dropped by two basis points, finishing the week at 2.08%.  Two year CD rates matched the movement of the one year CDs and moved lower by two basis points to 2.36%.  The best five year CD rates held steady with an average rate of 3.41%.

While bank CD rates continued their prolonged down trend this week, Treasury rates were mostly unmoved with the exception of the long term bonds.  Three month Treasuries ended the week right where they started at .18%.  The six month Treasuries were lower by three basis points, falling from a close of .29% on July 24 to .26% on July 31.  The one year Treasury note moved up one basis point to rest at .48%.  The ten year Treasury displayed a much clearer path, plummeting by 18 basis points, moving from 3.70% the previous Friday to 3.52% on Friday July 31. 

The continued direction of CD rates appears murky.  The economy is showing some signs of hitting bottom which may lead to higher loan demand and higher rates however, this is countered by less than definite proof of end to the recession and the comments earlier in the month by Federal Reserve members indicating rates may remain low throughout the year and inflation is of little concern.

The tug of war over rates is best displayed in the ten year Treasury yield.  July was an absolute crazy month for Treasury rates.  Ten year Treasury bonds moved between a low of 3.32% to a high of 3.75%, a variation of 43 basis points in just one month.

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