And what about housing?

Updated 9:42 AM PST — I found this article on Bloomberg. Subprime Crash Squeezes Out First-Time Home Buyers

RealtyTrac indicated May had a 90% rise in forclosures over last May.? These higher rates certainly will not help the housing market.

The longer the rates stay at these levels, the tougher it will be.? If those few buyers didn’t have their rates locked in, they are in for a big surprise come closing time.

Can the Fed stand the pressure?

Here is an article about pressure that the Fed is feeling to raise rates. This isn’t the most likely scenerio in my book, but here is the information so that you can form your own opinions. Fed Faces Pressure to Raise Rates, Options Show.

If the Fed were to raise rates, you would probably see the 6M and 1Y CD rates begin to approach 6% (25 – 40 BPs increase), but the long-term probably wouldn’t change nearly as much (maybe 10 – 15 BPs).

World Savings Bank CD Rates

World Savings has consistenly had competitive short-term CD rates as many banks have. Most banks currently offer higher rates on the shorter-term Certificates of Deposit, because they don’t think the Fed is going to be moving rates up.

The current high CD rate at World Savings is 5.27% APR / 5.41% APY for a 5-month CD or 5.32% APR / 5.45% APY for a 8-month CD.

Here is a link to their site. World Savings Bank.

Their FDIC# is 27076. World Savings is a very large bank with over $140 Billion in assets.

Bond Prices Down; Yields up

From Dwight Johnston of Wescorp.

Bonds are getting whacked this morning. (Well, something needed to get whacked after no one got whacked in last night’s Sopranos finale.) Friday’s bond rally from the early morning trade to 5.25% on the 10-year note is proving to me more of a short-covering rally than anything too meaningful. Virtually all weekend business journals and Wall Street economists’ reports are reporting the death of the bond market.

Before you bury the bond market, consider this. On June 13, 2006 the 10-year note yield was 4.90%. By June 26, 2006 the 10-year note hit 5.25%; a 35 basis point rise in just under two weeks. The combination of a hot economy in the early months of 2006 (led by strong housing starts) and rising inflation led all of the Wall Street to conclude that the Fed might raise rates beyond the expected 5.25%. Flash forward to 2007. Two weeks prior to Friday’s ascent to 5.25%, the 10-year closed at 4.88%; an increase of roughly 35 basis points.

For a few days in 2006 after the 10-year initially hit 5.25%, bond yields moved little but sentiment solidified that rates would in fact rise further. By September 1, 2006, the 10-year yield was 4.73%. Of course this doesn’t mean that pattern will be repeated this year. We have the equity merger mania to contend with this year that wasn’t a factor last year. But we do have even greater potential that the economic data will weaken further. Employment now is weaker than in 2006, the housing market is worse, credit problems are worse, and gas prices are higher.

Here is the full commentary.

Will Global Inflation tip the Fed’s hands?

This isn’t an angle I had anticipated. Check out this article. Years of global growth raise inflation worries

New Zealand raised their rates yesterday. Many fear more to follow.

Dwight Johnston of Wescorp has a new long-term commentary titled?And Then There Were None. The jest is, first of all, no one believes there will be a rate cut anytime soon. Which could mean there will be. When everyone is in consensus, many times someone comes in with the curve ball.

The other problem is the Fed is probably worried about further fueling the merger/buy-out craziness. Rates are still accomdative and if they lower them, that area will just go like wild fire. The Fed doesn’t want that bubble growing even faster. As a bubble grows (like a balloon), its protective covering becomes thinner and thinner, until, Bang!!! and stuff everywhere. Havoc would really break lose. Anyway, read the commentary and let’s have some discussion.

Best CD Rate

Our best personal CD rate and 5.71% APY (10Y Term; No Fee).? We also have a 1Y at 5.11% APR / 5.23% APY
Best Corporate rate is 5.12% APR for 2Y or the 10Y above.
Updated 11/15/2007.

Visit our Current Interest Rates to get started with our process.? We do have a fee for our service.?

Welcome to the CD Rates Blog

Why a blog?? Frankly, it makes it easier and cleaner to communicate new information.? We have been using our Top CD Rates and News Page.? But, everytime we make a post, it just gets larger and slower.

Blogs allow for a cleaner, faster, and better organized method for communicating new information.?? The main page shows just the last few posts, so it loads quickly.? In addition, the posts are all categorized and each category or monthly archive can be viewed in its entirety.

Most importantly though, is blogs allow for back and forth communication.? You can leave comments and we can respond.? The world will be better able to form opinions because various angles will be presented.

We will also have a?Bank Rates section with rates that we can’t help you with.? Sometimes, they will be higher and hopefully, most of the time, they won’t.? We will not warrant how easy they are to work with though.?? I can guarantee that no one will match my friendly and sunny personality.

Please come back soon and often.
cd :O)