The key news for today is the monthly CPI or inflation figures produced by the Bureau of Labor Statistics within the U.S. Department of Labor.  Today’s announcement showed that the CPI increased by 0.4% for the month of August.  Without the volatile food and energy component, the CPI increased by 0.1%.  For July, the aggregate figure was unchanged and without food and energy the CPI was up 0.1% in July.

The data is supporting the widely accepted view that inflation is mild and will remain this way for some time.  This position on inflation expectations is widely accepted but not universally accepted.  Of course, the Fed has repeatedly stated at the conclusion of their open market meetings that exceptionally low rates are expected for an extended period of time.

At the close of Tuesday, Treasury rates were lower to stable on the short end of the yield curve, one year term or less, with higher interest rates on the longer term maturities.  Six month Treasury rates held steady at 0.21% while the close of Tuesday and the one year dropped one basis point to 0.39%.  On the longer end, the five year Treasury gained four basis points moving from 2.37% to 2.41% while the ten year Treasury pushed ahead five basis points to close out the day with an interest rate of 3.47%.

Yesterday, the Federal Reserve Chairman Ben Bernanke stated that the recession in the U.S. has probably ended.  To precisely quote the Chairman, “…from a technical perspective the recession is very likely over at this point…”  It is tough to argue with a man who has access to a plethora of economic statistics and data.  But his speech does confirm that there is a difference between the end of a recession and a recovery. 

The Obama administration likes to use the word recovery, Bernanke takes a pass on that term.  Bernanke states, “…it’s going to feel like a very weak economy for some time…”  This adds some credibility to our belief that this may well in fact be the end of the recession but the average American is not going to notice.  Retail sales are not increasing, home loans will not get easier, debt burdens will continue to plague the middle class and employment opportunities will remain scarce.  Bernanke may be right, remember don’t fight the Fed, but at the same time the administration is dead wrong on this being a recovery.

Having said that, there is no significant news to report regarding bank CD rates today.  The big banks have not produced any major CD interest rate changes this week but keep you eyes open for the current and future opportunities as they appear on the CD rate tables on the enclosed pages.

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