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Do you think we will see 4% 5 year CDs before Year End?
Old 06-09-2018, 05:09 PM   #1
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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?
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Old 06-09-2018, 05:14 PM   #2
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Less than 4%, pun intended.
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Old 06-09-2018, 05:25 PM   #3
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There already are 4%CDs if you are willing to have extended duration. What duration are you talking about?
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Old 06-09-2018, 05:32 PM   #4
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Old 06-09-2018, 05:49 PM   #5
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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.
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Old 06-09-2018, 05:51 PM   #6
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The OP says 5 year CDs.
Well now with the OP’s edit to the title and the text, I say not a chance.
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Old 06-09-2018, 06:18 PM   #7
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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.
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Old 06-09-2018, 07:39 PM   #8
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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.
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Old 06-09-2018, 08:12 PM   #9
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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?
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Old 06-09-2018, 08:21 PM   #10
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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
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Old 06-09-2018, 10:38 PM   #11
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I expect 5 yr CDs will be ~3.75 by yr end.
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Old 06-10-2018, 05:37 AM   #12
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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...
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Old 06-10-2018, 06:16 AM   #13
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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. :-)

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Old 06-10-2018, 07:33 AM   #14
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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.
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Old 06-10-2018, 07:33 AM   #15
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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%.
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Old 06-10-2018, 07:36 AM   #16
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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.
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Old 06-10-2018, 09:43 AM   #17
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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.
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Old 06-10-2018, 09:47 AM   #18
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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.
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Old 06-10-2018, 10:08 AM   #19
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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.
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Old 06-10-2018, 10:18 AM   #20
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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.
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