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Fed cut 0.25% ... do you expect high-CD rates to go down?
07-31-2019, 12:06 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Aug 2013
Posts: 1,969
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Fed cut 0.25% ... do you expect high-CD rates to go down?
A few online banks like Ally, CapitalOne, Citi .. are offering 2.00% - 2.50% money market accounts and CDs. Do you guys see these banks cutting on the rates with the 0.25% rate cut.
Well, on the other hand, this will keep equities and the stock market afloat.
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07-31-2019, 12:09 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Mar 2012
Posts: 3,931
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CD rates have been soft the past month in expectation of this. They'll likely fall a bit more as there is strong demand for them.
Equities will sell off some, because this rate cut was already baked in as the indexes were hitting all-time highs this past week. Sell the news.
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07-31-2019, 12:12 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Aug 2013
Posts: 1,969
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Yes, I agree the rates have soften. Do you think the banks already built in the .25% cut in ? Because CapitalOne was previously offering 2.7% on the 1-yr, then 2.5% and now it is just 2.3%.
Yeah, I was hoping the sell off won't be too much. As of now, Dow is only down -37 and Nasdaq is green. Looks like equities are holding. But Powell has not spoken yet, so I hope he does not spook the market.
Quote:
Originally Posted by njhowie
CD rates have been soft the past month in expectation of this. They'll likely fall a bit more as there is strong demand for them.
Equities will sell off some, because this rate cut was already baked in as the indexes were hitting all-time highs this past week. Sell the news.
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No to consumerism, Living a simple life, enjoying the experience - not the material stuff
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07-31-2019, 12:15 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Mar 2012
Posts: 3,931
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I think the CD rates will slowly continue lower. There is certainly no expectation that rates will be raised between now and the elections next year. Couple that with strong demand for quality fixed rate securities and there is no reason for the banks not to lower the rates.
I keep a close eye on the secondary market CDs and new issues and they are all being snapped up. The expectation is flat or lower rates.
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07-31-2019, 01:10 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Aug 2013
Location: North
Posts: 4,029
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Looks like people are taking profits. At least all my highest performers are taking the hit... Which makes sense if rebalancing...or profit taking.
Sell the winners/ Sell high!
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Time > $$$ ~ 100% equities ~ FIRE @2031
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07-31-2019, 02:43 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Aug 2013
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Ok Powell spooked the market, but I think it's exaggerated.
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07-31-2019, 04:35 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,006
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Yep - CD rates are going to keep drifting down.
I usually look at the trends in various Treasury rates to get an idea of where high yield and CD accounts will likely go. Maybe 3 month treasuries for high yield accounts and money market funds. Longer term treasuries for CDs. It doesn't always match, but they do seem to eventually converge.
https://www.treasury.gov/resource-ce...Year&year=2019
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Retired since summer 1999.
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07-31-2019, 04:36 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,006
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Quote:
Originally Posted by cyber888
Ok Powell spooked the market, but I think it's exaggerated.
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Classic sell on the news.
The market was also disappointed the Powell didn't signal yet more rate cuts.
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Retired since summer 1999.
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08-01-2019, 11:41 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Aug 2013
Posts: 1,969
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Quote:
Originally Posted by audreyh1
Classic sell on the news.
The market was also disappointed the Powell didn't signal yet more rate cuts.
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Market was recovering today .. and then boom .. Announcement: new China Tariffs on $300 Billion goods
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No to consumerism, Living a simple life, enjoying the experience - not the material stuff
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08-04-2019, 05:11 AM
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#10
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Recycles dryer sheets
Join Date: Aug 2015
Posts: 179
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CD rates are now approaching levels below inflation and it hardly makes sense to buy one beyond one year IMHO.
Where does one go for a "safe" 3-4% yield?
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08-04-2019, 05:31 AM
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#11
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Dryer sheet aficionado
Join Date: Apr 2012
Posts: 33
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PurePoint Financial lowered their CD one year rate from 2.35% to 2.25% and on-line savings rates from 2.25% to 2.15%.
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08-04-2019, 06:48 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,666
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Quote:
Originally Posted by 53anddone
CD rates are now approaching levels below inflation and it hardly makes sense to buy one beyond one year IMHO.
Where does one go for a "safe" 3-4% yield?
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We are CD investors (Hardly call it investing) averaging 3.52% on our stash with CDs ranging from 22months to 5 years from this latest round (All matured in 2019 and are all reinvested now, for 3 months already actually). That is plenty enough for us to live on for the foreseeable future. We do not take out SS or Foreign equivalents (UK and Canada) yet, we will probably wait till ACA goes away (If it ever does) before we take them. We have 5 years of Cash in MM to get us by and re-invest dividends on the CDs to get max APY. Sleeping very well now.
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