The ten year Treasury rate opened below 3.00% at the start of trading this morning. This is the first dip below 3.00% this year. This month, Treasury rate have moved consistently lower amid continued market uncertainty over government debts and a double dip recession. This mornings lower yields have sent Treasury rates to the lowest point for the year, in fact the ten year Treasury rate is at the lowest level since April 2009. The two year Treasury had traded as low as 0.585% this morning, a record low for that maturity.

Many bank rate watchers have sat on the sidelines as most financial soothsayers started have calling for a rise in the general level of interest rates in 2009 and through most of this year. Suddenly, deflation is becoming a greater concern and interest rate forecasts are being revised lower.

The biggest factor that had been influencing predictions for a rise in interest rates is the amount of government debt. For the most part, Selectcdrates.com falls into the camp that believes excessive government borrowing will lead to inflation and higher Treasury rates and bank rates. But, excessive government debt takes years to influence rates.

There are other industrialized countries with a far greater debt burden that have not seen rates rise. The most glaring example of this situation is Japan. Total government debt in Japan is almost double that of the U.S. yet interest rates in Japan have remained low; lower in fact those in the U.S.

Don’t fight the Fed is lesson number on investing and Ben Bernanke has stated that he does not believe the economy is headed lower or that a double dip recession is in the cards. However, all the troubles of the U.S. including a previously inflated real estate values, inflated stock market values and excessive government spending were all factors leading to Japan’s lost decade. A decade ( and then some ) of lost market values across almost all asset classes and an economy that remained in neutral. How the U.S. will escape that fate is unknown. Of course, no economists are expecting the U.S. economy to follow Japan. Err.. Why? Who knows. No one seemed to expect a ten year Treasury rate under 3.00% either.

Safety and security in bank CDs may be a wise investment choice. Laddering maturities to avoid having all bank CD investments held in ultra short term CDs is also a wise choice.

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