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Direction of CD Rates This Year

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Which direction are CD rates headed in the near future? Unfortunately for depositors, CD rates will stay at these low levels for the rest of 2010 and possibly stay low into 2011. The economy is slowing down and inflation isn't a threat to force the FOMC to increase interest rates. In fact, these days there is more of a concern about deflation than inflation.

Recent economic numbers, including GDP released on Friday showed the economy slowing to a 2.4 percent annual rate for the second quarter, down from the first quarter's rate of 3.7 percent.

The Federal Reserve's Beige Book report last week showed economic activity continues to increase modestly but two districts, Atlanta and Chicago, said the pace of economic activity slowed recently.

The Federal Reserve also revised down their outlook for growth in their June minutes released late last month. The fed believes inflation still isn't a concern at this point for them to raise interest rates. A slowing economy and low inflation will keep a lid on CD rates for the foreseeable future.

Here is a list of the national average CD rates as of August 2, 2010.

Current National Average CD Rates

3 Month CDRates; Deposit Amount $1 – $10,000 0.364% 0.371%
6 Month CDRates; Deposit Amount $1 – $10,000 0.632% 0.632%
12 Month CDRates; Deposit Amount $1 – $10,000 0.880% 0.889%
18 Month CDRates; Deposit Amount $1 – $10,000 1.053% 1.066%
24 Month CDRates; Deposit Amount $1 – $10,000 1.322% 1.345%
36 Month CDRates; Deposit Amount $1 – $10,000 1.735% 1.751%
48 Month CDRates; Deposit Amount $1 – $10,000 1.985% 1.991%
60 Month CDRates; Deposit Amount $1 – $10,000 2.323% 2.322%
Author: Brian McKay
August 2nd, 2010