This past Thursday (September 17), the Federal Reserve made its long awaited announcement regarding the Fed Funds rate and continued accommodative monetary policy.  The bond market advanced and rates dropped as soon as the announcement was released that the Fed would be leaving the Fed Funds rate unchanged.

Long term rates dropped as did short term interest rate as the market digested the information coming from the Fed.  The market moving news from the Fed may not have been so much the unchanged Fed Funds rate but the reasons given for holding off on a rate increase.

Concerns expressed by Fed Chair, Janet Yellen, over the fragile state of the global economy was the big take away from the Fed’s decision.  The Fed painted a picture of a bearish global state of affairs and weak inflation.  A weaker economic outlook, as a framed by the Fed commentary, tends to put downward pressure on long interest rates while the continued low Fed Funds rate puts downward pressure on short term rates.

Longer term rates like the 10 year Treasury and the rates on long term mortgage bonds moved lower immediately after the Fed announcement.  Short term bonds and Treasury rates were even more dramatically impacted relative to longer term securities. 

Following the Fed, mortgage lenders lowered the rate on the 30 year fixed rate loan to 3.875% by Friday with some lenders going as low as 3.75%.  The ten year Treasury bond yield dropped to 2.13% at the close of Friday after hitting a high of 2.28% during the week.  Most short term bank rates were unaltered for the week, however, short term Treasury made dramatic reversals. 

The six month T-bill closed out the week at a meager yield of 0.10%.  The six month Treasury was at 0.26% just two days earlier.  The one year Treasury made a similar decline during the week, falling to 0.35% from an high of 0.47% reached prior to the Fed’s decision.

The best bank CD rates actually climbed slightly for the week.  These were the only rates in the weekly bank rate survey conducted by to show an increase week over week.  The CD rate index moved up to 1.225% from 1.223% in the previous week.  The index of the highest yielding bank CDs was lifted by increases in short term rates, both the six month term certificates as well as the one year certificates moved higher for the week.

The top bank money market account rates and savings account rates were unchanged at 1.015%.  Credit card rates were also unaltered with an average cost to consumers of 13.88%.

Bank rates market recap for September 21, 2015:

CD interest rates:
Composite CD interest rate index 1.225 percent
3 month CD rates 0.436 percent
6 month CD rates 0.845 percent
1 year CD rates 1.232 percent
2 year CD rates 1.400 percent 
5 year CD rates 2.212 percent

Money market and savings account rates:
Bank money market rates and savings account rates 1.015 percent

Mortgage rates: 
30 year mortgage rates 3.946 percent
15 year mortgage rates 3.250 percent
20 year mortgage rates 3.756 percent
30 year jumbo mortgage rates 3.790 percent
30 year FHA mortgage rates 3.783 percent

Credit card rates:
Credit card rates for new credit card offers 13.88 percent

US Treasury rates:
Six month Treasury rate 0.10 percent
One year Treasury rate 0.35 percent
Two year Treasury rate 0.69 percent
Five year Treasury rate 1.45 percent
Ten year Treasury rate 2.13 percent

All bank savings rates and lending rates are based on surveys conducted by at the close of September 18, 2015 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.  

For more detailed interest rate data on mortgage rates, CD rates, credit card rates and savings account rates for the week ending September 18, 2015 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, best interest checking accounts and best credit card rates.

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