Interest rates made a moderate move to the upside after the first week of September was laid to rest.  While the rate increase was moderate for mortgage loan products, the CD rate increases for the week were notable.  What is even more startling was the rate increases took place during a week or news and data that would have normally driven rates lower.

Data and news report for the week was fairly substantial yet, garnered very little attention by the news and the interest rate markets.  Friday saw the release of the monthly jobs report which generally pushes interest rate one way or another when the numbers do not match expectations.  The number for the jobs gains in August certainly did not match expectations.  Job growth was reported at 142,000 which was well below the expectations of 200,000 to 225,000.  Unusually low numbers is a sign of a weak economy and puts pressure on the Fed to maintain a position of easing and low rates longer than anticipated.

The other big news for interest rates and bonds was the European Central Bank (ECB) announcement to provide more stimulus to the European Union.  The European Central Bank cut all its main interest rates and announced they will be undertaking a program similar the Fed’s quantitative easing program by buying private bonds and assets.  The actions were somewhat expected but the combined ECB proclamation and the poor employment report would generally lead to lower rates, not higher rates.

Rates for home loans followed Treasury rates and ticked up by just a few basis points this past week.  The average 30 year fixed rate mortgage loan increased to by just over two basis points to 4.183 percent.  The ten year Treasury bond was a bit higher, climbing by 11 basis points to 2.46 percent.  One basis point is equal to 1/100th of a percent.

CD rates were also higher on the week but the increase was much more pronounced relative the low levels CD and savings rates have been holding at through the year.  The average CD rate measured by the CD rate index moved up by 1.8 basis points to 1.142 percent.

The CD rate index measures the top ten best CD rates on the three month term CDs, six month term CDs, one year CDs, two year and five year bank CDs available nationally.

Rather sizeable increases were seen in the one year, two year, and five year CD maturities.  The best one year CD rates available nationally rose to 1.095 percent from 1.070 percent in the week earlier.  A substantial move in the CD rate market.  Two year certificates saw an increase from 1.239 percent to 1.265 percent over the course of the week.  The five year rates jumped by four basis points to end the week with an average yield of 2.216 percent.  As a rule, banks raise these rates when they are competing for new depositors and searching for fresh money to expand business.

The weekly bank rate survey provides a detailed report on bank savings rates and lending rates by consumer rate category.  The most current survey is for the week ending September 8, 2014.  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 for September 8, 2014

CD interest rates:
Composite CD interest rate index 1.142 percent (up .018 percent)
3 month CD rates 0.395 percent (down .001 percent)
6 month CD rates 0.737 percent (unchanged)
1 year CD rates 1.095 percent (up .025 percent)
2 year CD rates 1.265 percent (up .026 percent)
5 year CD rates 2.216 percent (up .04 percent)

Money market and savings account rates:
Bank money market rates and savings account rates 0.955 percent (down .001 percent)

Mortgage rates:
30 year mortgage rates 4.183 percent (up .019 percent)
15 year mortgage rates 3.402 percent (up .024 percent)
20 year mortgage rates 3.900 percent (up .034 percent)
30 year jumbo mortgage rates 4.058 percent (unchanged)
30 year FHA mortgage rates 3.933 percent (unchanged)

Credit card rates:
Credit card rates for new credit card offers 13.88 percent (unchanged)

US Treasury rates:
Six month Treasury rate 0.05 percent (unchanged)
One year Treasury rate 0.10 percent (up .01 percent)
Two year Treasury rate 0.52 percent (up .04 percent)
Five year Treasury rate 1.69 percent (up .06 percent)
Ten year Treasury rate 2.46 percent (up .11 percent)

All bank savings rates and lending rates are based on surveys conducted by at the close of September 8, 2014 with all of the interest rates obtained directly from the banks within the survey.  Treasury rates are obtained directly from the Department of the Treasury.

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