![]() ![]() ![]() One month ago, the top non-callable brokered CD rates were 5% or higher for terms of 3 months to 5 years. These yields are based on the Daily Treasury Par Yield Curve Rates.īrokered CD rates tend to closely follow Treasury yields, and that’s what we’ve seen in the last month. ![]() The 2-year Treasury yield fell below 4% today to 3.95%, and the 5-year yield fell to 3.46%. Yields have fallen since the banking troubles began, and yields remain much lower than they were just before the bank failures occurred. These market expectations that the Fed will be cutting rates this year have impacted Treasury yields. The Fed Funds futures currently show odds of about 91% that the target federal funds rate will be lower in December than it is today. The Fed Funds futures (per the CME FedWatch Tool) currently show 70% odds of a 25-bp rate hike at the Fed’s May 2-3 meeting.Įven without renewed banking stress, the markets continue to expect Fed rate cuts later this year. Last month it looked like the bank failures and the related stress in the banking industry were going to force the Fed to change course, but the banking stress has eased. Headline CPI inflation was slightly under expectations, but Core CPI remains stubbornly high, and that should pressure the Fed to follow through on its dot plot that shows the target federal fund rate peaking at 5.00%-5.25%. Based on the March CPI report that was released today and the minutes from last month’s FOMC meeting, another 25-bp rate hike looks likely for the Fed’s May 2-3 meeting. ![]()
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