February 4th, 2009
It has been very busy around here. I’m sorry that I haven’t posted in a while.
Big question. I wish I had big answers. Fed funds will most likely remain at the current level (0.00 to 0.25%) for the remainder of the year. CDs will probably continue to slide to levels around 1.5% to 2.00% for 1Y and 3.25% to 3.50% on longer-term CDs. Those are the levels we saw back in the lows of 2003 when Fed funds were at 1.00%.
Assuming the economy is beginning to make some recovery in 2010, the Fed could start to raise rates in early 2010 to Mid 2010. They tend to raise rates slower than they brought them down, so rates will probably remain relativley low through 2010.
The unknown is how much all of the bail-outs will affect higher inflation fears. Certainly, it would seem that at some point, the Piper is going to have to be paid. However, the Fed will be very leary of rates getting out of hand.
Housing probably won’t get much better this year. There are a lot loans that re-setting this year. Even though re-fi rates are down, many people still can’t re-fi because of the value of the home is way below what they purchased at. This will still leave many homeowners unable to pay their mortgages and more foreclosures. And of course, many more people have lost their jobs this year. 2010 will remain tough for housing.
The Gov’t is planning massive “bail-outs” that don’t amount to much more than pork heaven. I urge you to contact your representatives and tell them to take the pork out or be thrown out of office. This is just crazy.
I thought I would leave you with some positive thoughts.
The world bursts at the seams with people ready to tell you you’re not good enough. On occassion, some may be correct. But do not do their work for them. Seek any job: ask anyone out; pursue any goal. Don’t take it personally when they say “no” – they may not be smart enough to say “yes.” — Keith Olbermann (Broadcast journalist and host of MSNBC’s Countdown with Keith)
P.S. Here is a site with more best cd rates.
-- By +Chris Duncan