Do you think we will see 4% CDs before Year End?

[ShokWaveRider]

Do you think we will see 4% 5 year CDs before Year End?

As the title says, what do you all think the chances of a 4% 5 Year CD in 2018?

 

[GrayHare]

Less than 4%, pun intended.

 

[COcheesehead]

There already are 4%CDs if you are willing to have extended duration. What duration are you talking about?

 

[bobandsherry]

Yes, no, maybe.... Guaranteed to be right

 

[Earl E Retyre]

There already are 4%CDs if you are willing to have extended duration. What duration are you talking about?

The OP says 5 year CDs.

 

[COcheesehead]

The OP says 5 year CDs.

Well now with the OP’s edit to the title and the text, I say not a chance.

 

[foxfirev5]

This week the best 5 year with call protection is 3.3%. With the yield curve so flat it would hard to imagine anything over 3.5%, even with a couple of Fed increases. But who knows? It doesn't matter to me since I don't market time fixed income or equities.

 

[njhowie]

This week the best 5 year with call protection is 3.3%. With the yield curve so flat it would hard to imagine anything over 3.5%, even with a couple of Fed increases. But who knows? It doesn't matter to me since I don't market time fixed income or equities.

This past week I've been able to buy CDs in the secondary market at 3.57% for 5 years + 9 months, call protected.

We may not see 4% for 5 years, but I'm fairly confident that you will be able to get 4% for 10-year in the secondary market by year end.

 

[NW-Bound]

I remember that the credit union at work paid something like 12%, or perhaps even higher, in 1980 for some short-term CD.

Now, that was an exciting time as inflation was running even higher. My 30-year mortgage rate was 14%. Will we see that again?

 

[bobandsherry]

I remember that the credit union at work paid something like 12%, or perhaps even higher, in 1980 for some short-term CD.

Now, that was an exciting time as inflation was running even higher. My 30-year mortgage rate was 14%. Will we see that again?

I was just getting started in my career then. Bank I worked at had 14% repo's. I remember a dentist had mortgage at 18%, all tied to getting his business started. Mortgage rates were indeed 12%, but i managed to get my first place at under 7% with an assumable mortgage. How many recall repo's and assumable mortgages? Lol

 

[jazz4cash]

I expect 5 yr CDs will be ~3.75 by yr end.

 

[ncbill]

I remember that the credit union at work paid something like 12%, or perhaps even higher, in 1980 for some short-term CD.

Now, that was an exciting time as inflation was running even higher. My 30-year mortgage rate was 14%. Will we see that again?

My credit union's money market paid 9% when I was a kid.

I remember thinking if only I had a million or so I could live large...

 

[Bryan Barnfellow]

I was just getting started in my career then. Bank I worked at had 14% repo's. I remember a dentist had mortgage at 18%, all tied to getting his business started. Mortgage rates were indeed 12%, but i managed to get my first place at under 7% with an assumable mortgage. How many recall repo's and assumable mortgages? Lol

Ah yes, I remember those days. 14%, 16%, 18% and higher annual raises too! Damn, I must have been an amazing performer back then.

-BB

 

[NW-Bound]

My megacorp had to give everybody "emergency" 6-month raises so their salaries could keep up. Else, new hires could make a lot more than existing engineers.

 

[CardsFan]

I remember that the credit union at work paid something like 12%, or perhaps even higher, in 1980 for some short-term CD.

Now, that was an exciting time as inflation was running even higher. My 30-year mortgage rate was 14%. Will we see that again?

And the "conventional wisdom" at the time was we would never again see mortgage interest rates below 10%.

 

[NW-Bound]

Yes. I was worrying about my younger brothers, saying they would not be able to buy homes as I saw that the mortgage rate climbed up to 16% from the 30-year 14% that I paid.

 

[Chuckanut]

My first mortgage was 8 1/2%, second - 12 3/4% which I refinanced later with a variable rate mortgage which was 1.6% over the current one year t-bill rate (Best darn mortgage I ever had!!!) After that it was a 6.6% mortgage which I paid off early when my standard deduction was larger than my interest+taxes deduction (yes, it was a very small mortgage by then).

I would like to see 4%, but not at the cost of an inflationary hike.

Mostly, I would like to see my savings, after taxes and inflation yield at least 2%. The current inflation rate is about 2.5%, so we are long way from that.

IMHO, the war on savers still continues, it's just not as brutal as it has been previously.

 

[ShokWaveRider]

What rate would convince you (Anyone here) to take a substantial chunk out of the stock market and lock it up for 5 years? Enough that you could live off the interest, or in addition to a modest withdrawal from capital.

 

[FIRE'd@51]

As the title says, what do you all think the chances of a 4% 5 Year CD in 2018?

Unlikely, based on the current Treasury yield curve. The forward 5-year rate one year from today based on current Treasury yields is only about 17 basis points higher than the current 5-year rate.

 

[Dtail]

My first mortgage was 8 1/2%, second - 12 3/4% which I refinanced later with a variable rate mortgage which was 1.6% over the current one year t-bill rate (Best darn mortgage I ever had!!!) After that it was a 6.6% mortgage which I paid off early when my standard deduction was larger than my interest+taxes deduction (yes, it was a very small mortgage by then).

I would like to see 4%, but not at the cost of an inflationary hike.

Mostly, I would like to see my savings, after taxes and inflation yield at least 2%. The current inflation rate is about 2.5%, so we are long way from that.

IMHO, the war on savers still continues, it's just not as brutal as it has been previously.

Real returns averaging at least 2% would likely ensure portfolio survival for most posters.

 

[pb4uski]

In answer to the question.... probably not.

 

[Running_Man]

5 Year Treasury Rate - 54 Year Historical Chart | MacroTrends
Based on history it is unlikely to move that far that fast, however it is not out of the question, there have been interest rate moves of that velocity. However the biggest move in the 5 year treasury was Nov 1976 - Sept 1981 when the 5 year rate went from 5.99 to 15.83. Since that time until just recently the interest rate curve has been on a trending down slope, which recent activity seems to have stopped. Of course in the old days the FED didn't buy most of the market.