Fed Accidently Releases Data as Best 1 Year CD Rate Remains at 1.25%
We now have four banks tied with the best 1 year CD rate in the rate database. E-Loan.com recently increased their 1 year CD rate and now has the top rate along with Synchrony Bank, CIT Bank and Sallie Mae Bank. These four banks are currently offering 1 year CD rates at 1.24 percent with a yield of 1.25 percent.
Banks have increased deposit rates in anticipation of the Federal Reserve increasing the fed funds rate. Exactly when the Fed increase the rate isn't know but a recent document leak points to only one rate increase in 2015.
The Fed inadvertently published the wrong document on its website. It provided staff policy projections, including the fed funds rate projected to bet at 0.35 percent by the end of 2015. The current rate is hovering around 0.13 percent, so a 0.35 percent rate would mean only one hike of 0.25 percent in 2015.
The fed funds rate at 0.35 percent might send the highest 1 year CD rates above 1.50 percent by the end of the year. We were forecasting at least 2 or 3 rate hikes this year and the top 1 year CD rates around 2.00 percent by the end of the year.
The Fed also released slightly lower outlooks for gross domestic product and inflation in 2015, as well as other revisions. The forecasts that were released do not represent the views of the central bankers who decide interest rate policies. The staff projects that were accidently released were of policymakers in regional Fed branches.
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