Rate divergence on the yield curve has returned once again to the market.  Short term rates have increased in yield while long term rates have dropped.  On the short term end, we have seen higher CD rates and short term Treasury rates.  On the longer end of the curve, fixed rate securities with terms of five years plus, we see lower interest rates on both mortgage loan products and long term Treasuries notes and bonds.

As of mid-December, the best bank CD rates have climbed to their highest levels of the year.  The average rate on the top bank CDs available nationally, measured by the SelectCDrates.com CD rate index, has moved up to 1.243%.  Rate increases in the past week popped up on promotions for the highest six month CD rates as well as those on the highest two year term certificates and five year term bank CDs.  Three month rates and one year rates were unchanged on the week.

Matching the move in CD rates, which are considered short or shorter tem fixed income accounts, was a jump in short term T-bill rates.  Six month Treasury rates ended the week with a yield of 0.52%, up three basis points on the week while one year Treasury rates climbed eight basis points to close out the week at 0.68%.  One basis point is equal to 1/100th of a percent.

In contrast to the rise in short term savings rates, long term mortgage rates declined slightly on the week.  The average 30 year mortgage coming from the nation’s leading bank mortgage lenders was cut back to 3.778%, a drop of approximately four basis points.  30 year FHA mortgage rates and 30 year jumbo rates were also lower on the week with the 30 year FHA rate dipping to 3.813% and 30 year jumbos sliding to 3.778%.

Long term Treasuries moved right along with mortgage rates, as one might expect.  The benchmark, 10 year Treasury rate gave up 15 basis points over the course of the week to close at 2.13%.  Other long term Treasuries were down as well, the five and seven year note was also cut by 15 basis points to end the week with a 1.56% and 1.91% yield, respectively.

The rise in short term rates is not terribly surprising with the December Fed meeting coming up and market expectations calling for announcement by the Fed that rates will rise via an increase in the fed funds rate target.  Long term rates generally rise right along with fed actions however, with economic news coming in slower in recent weeks perhaps the market expects the Fed to take a long pause following this coming move and slow growth generally leads to low inflation rates and interest rates.

Bank rates market recap for December 14, 2015:

CD interest rates:
Composite CD interest rate index 1.243 percent (up 0.008%)
3 month CD rates 0.436 percent (unchanged)
6 month CD rates 0.820 percent (up 0.02%)
1 year CD rates 1.250 percent (unchanged)
2 year CD rates 1.427 percent (up 0.003%)
5 year CD rates 2.234 percent (up 0.018%)

Money market and savings account rates:
Bank money market rates and savings account rates 1.060 percent (unchanged)

Mortgage rates:
30 year mortgage rates 4.047 percent (down 0.01%)
15 year mortgage rates 3.363 percent (down 0.001%)
20 year mortgage rates 3.838 percent (up 0.038%) 3.813
30 year jumbo mortgage rates 3.778 percent (down 0.037%)
30 year FHA mortgage rates 3.813 percent (down 0.02%)

Credit card rates:
Credit card rates for new credit card offers 13.89 percent (up 0.01%)

US Treasury rates:
Six month Treasury rate 0.52 percent (up 0.03%)
One year Treasury rate 0.68 percent (up 0.08%)
Two year Treasury rate 0.88 percent (down 0.08%)
Five year Treasury rate 1.56 percent (down 0.15%)
Ten year Treasury rate 2.13 percent (down 0.15%)

All bank savings rates and lending rates are based on surveys conducted by SelectCDrates.com at the close of December 11, 2015 with all of the interest rates obtained directly from the banks within the SelectCDrates.com survey.  Treasury rates are obtained directly from the Department of the Treasury.

Additional interest rate data on current mortgage rates, CD rates, credit card rates, and savings account rates for the week ending December 11, 2015 can be found at the following interest rate tables: 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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