Interest rates on bank loans and savings products have jumped to the highest levels for the year going into the second week of June.  The ten year Treasury bond, a good barometer for the interest rate market, is coming very close to reaching 2.50 percent.  The long bond hit the 2.50 level last during the month of September in 2014.  While the market is all abuzz about rising interest rates, these numbers should be put in perspective, 2014 started with the ten year yield at precisely 3.00%.

For now, rates are certainly at their peaks for the year.  Almost all Treasury maturities are measurably higher with the exception of the very short term maturities.  The six month T-bills have barely moved, ended the week of June 5th at 0.09%.  The one year Treasury rate is up modestly to close the week at 0.27%.  Mid and long term maturities were up a lot more with the ten year climbing over 20 basis points in one week to close at 2.41% and the five year jumping a like amount to close at 1.75%.  One basis point is equal to 0.01%.

Mortgage rates, CD rates, and short term savings rates all jumped on the week.  The CD rate index moved up to 1.182% by week’s end, the highest point for 2015.  Three month CD rates were little changed as were the one year maturities but the average bank rate on the top six month CDs, two year CDs and five years forged ahead.  Six month certificates climbed to 0.795% on the week.  The best two year CD rates moved up to 1.360% and the five year term CD accounts reached 2.147%.

30 year mortgage rates are now solidly above the four percent threshold.  The average 30 year conforming loan has a rate of 4.178%.  Jumbo rates trailed the conforming loan amounts slightly with an average cost of 4.060%.  FHA loans with a 30 year term are just holding under four percent with an average rate of 3.905%.

Money market account rates and savings accounts rates ticked a bit higher.  The average rate of return on these savings instruments moved up to 0.987%.

More jobs overall, stronger than expected private payrolls, revisions higher to the prior month’s numbers, and higher wage gains were responsible for a great deal of last week’s rate gains.  While Greece is still causing a great deal of consternation in the global market, there is less uncertainty in most global financial markets.  Japan is seeing new growth, Europe with the exception of Greece is moving forward, and stimulus in China is stimulating…investors. 

Positive economic data points such as those outlined generally lead to lower bond prices and rising loan rates.  And though inflation has remained tame so far, inflation and employment numbers are two economic indicators the Fed hones in on as a guide to changing monetary policy and the timing of a hike in short-term interest rates.

Bank rates market recap for June 8th, 2015:

CD interest rates:
Composite CD interest rate index 1.182 percent
3 month CD rates 0.431 percent
6 month CD rates 0.795 percent
1 year CD rates 1.178 percent
2 year CD rates 1.360 percent 
5 year CD rates 2.147 percent

Money market and savings account rates:
Bank money market rates and savings account rates 0.987 percent

Mortgage rates: 
30 year mortgage rates 4.178 percent
15 year mortgage rates 3.402 percent
20 year mortgage rates 4.000 percent
30 year jumbo mortgage rates 4.060 percent
30 year FHA mortgage rates 3.905 percent

Credit card rates:
Credit card rates for new credit card offers 13.89 percent

US Treasury rates:
Six month Treasury rate 0.08 percent
One year Treasury rate 0.29 percent
Two year Treasury rate 0.73 percent
Five year Treasury rate 1.75 percent
Ten year Treasury rate 2.41 percent

All bank savings rates and lending rates are based on surveys conducted by at the close of June 5th, 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.

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