Opinion on Interest Rates status going forward

[street]

I know there is no crystal balls but what would be your guess on CD rates going up after Nov.1st Fed meeting?

Thanks

 

[ShokWaveRider]

Poll?

Up .25% IMVUHO (In My Very Uneducated HOPEFUL Opinion)

 

[audreyh1]

My guess is, especially after today’s strong employment report, they stick with another 0.25% Fed rate increase.

Will that increase CD rates? Maybe.

Longer rates have already been climbing, so keep an eye on those CD rates now.

 

[pb4uski]

In theory IF the Fed increases interest rates then the short end of the curve should go up as well so CD rates for less than a year "should" drift upward. That doesn't necessarily mean that CD rates for longer maturities will change.

I read something the other day that suggested that the recent increase in market yields in longer maturities may have "done the job for them" so the Fed could again defer another rate increase.

 

[target2019]

I believe it will be a .25 increase. That is what's been discussed.

 

[street]

My guess is, especially after today’s strong employment report, they stick with another 0.25% Fed rate increase.

Will that increase CD rates? Maybe.

Longer rates have already been climbing, so keep an eye on those CD rates now.

This is my thought and view on it also. I have a couple coming due next week and then the 10th of November.

I know the market timing isn't the way to go but I might wait till end of November to re-enter the CD market on those two CD's. I will think about it and maybe just put the one that comes due next right back in which is a little better what it is doing now.

Thank You all again for your opinions.

 

[Car-Guy]

I know there is no crystal balls but what would be your guess on CD rates going up after Nov.1st Fed meeting?

Thanks

The last time I checked it said the fed would raise rates another .25%.... Shorter term CD's to follow in a few weeks


I'll check again.

 

[street]

The last time I checked it said the fed would raise rates another .25%.... Shorter term CD's to follow in a few weeks


I'll check again.

Lol!!

I like that crystal ball I hope it is right. Thanks

 

[Montecfo]

I don't think the Fed raises in Nov. The general rise in longer rates is doing the Fed's work.

And importantly, wage increases are subdued and inflation headed steadily downward.

So this is suggesting their hoped for soft landing may be happening. No need to upset that.

As far as CD rates they should move up slightly in concert with treasuries. That they haven't (and peaked in March) suggests to me treasuries may be an outlier here with their large more on the 10y.

 

[11522914]

With today's strong employment report I believe the Fed will raise .25 in the remainder of 2023.

I also still believe we will see an uptick in inflation in the 4th quarter which will start with the CPI reported in November. However, my belief has diminished somewhat due to the recent drop in oil.

It will be interesting to say the least.

 

[audreyh1]

With today's strong employment report I believe the Fed will raise .25 in the remainder of 2023.

I also still believe we will see an uptick in inflation in the 4th quarter which will start with the CPI reported in November. However, my belief has diminished somewhat due to the recent drop in oil.

It will be interesting to say the least.

Oh, I hadn’t noticed oil had dropped down closer to $80. Thanks!

 

[Montecfo]

Oh, I hadn’t noticed oil had dropped down closer to $80. Thanks!

Dollar's strength reduces prices of many commodities.

 

[Lsbcal]

I know there is no crystal balls but what would be your guess on CD rates going up after Nov.1st Fed meeting?

Thanks

The best source I know of is CME. It shows the daily changes in anticipated Fed rates based on futures prices (I think). See:
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html

Currently it shows 73% anticipate no Fed hike in November.

 

[FREE866]

I have no idea where rates are headed. But It’s a widely accepted myth that high interest rates is automatically negative for stocks.
The media perpetuates this myth daily with headlines pretty much every day the market moves down. “ fear of higher rates push stocks down……”

It’s so baked into people’s psyche it’s scary even in the face of historical data that debunks that myth.

 

[RetireBy90]

My humble opinion on the matter is that it all relates to supply and demand. WSJ recently reported the spread between 10 year and fed rate is overly wide. Lots of things will play not rates going forward. Lots of US debt to finance should put upward pressure on all rates. Banks and credit unions have lots of low rate debt held on the books as “hold to maturity”. If they keep they can’t pay great CD or deposit rates to they loose money. If they sell them they take a loss. At some point people will get more used to current rates and buy houses again. And, as time goes along, we will start to feel less anxious about rates where they are. They aren’t high historically, just relative to last 13 years or so.
My guess is rates go higher unless we see a recession.

 

[freedom2022]

If the Fed raise interest rate, will it deter people spending too much for Christmas?
If it does, the Fed will raise 0.25%.

 

[marko]

I have no idea where rates are headed. But It’s a widely accepted myth that high interest rates is automatically negative for stocks.
The media perpetuates this myth daily with headlines pretty much every day the market moves down. “ fear of higher rates push stocks down……”

It’s so baked into people’s psyche it’s scary even in the face of historical data that debunks that myth.

The past three months haven't been very good for my stocks. September was a disaster, but my fixed income has improved dramatically.

 

[marko]

Funny, but I'm guessing that most folks here are viewing increasing rates as an investment positive. I sure am! Most of us are on the other side of the curve where we're reaping the high rates instead of paying them.

Even non- investor friends are commenting on how suddenly they're seeing nice returns.

 

[FREE866]

Historical returns

 

[Surewhitey]

Historical returns

What about starting at 0-6%? These appear to only be 2 PT spreads...either way, the 4-6% is pretty crummy by comparison.

 

[FREE866]

What about starting at 0-6%? These appear to only be 2 PT spreads...either way, the 4-6% is pretty crummy by comparison.

The way I read it is when the 10 year bond starts out at X the return on stocks has historically been Y.
sure, that range is less, but still pretty good in my book. I guess my point is you wont see a chart like this as the leading news story because that isn't what sells. And it debunks , with data, the narrative that higher rates spell doomsday for stocks.

 

[Closet_Gamer]

I think we may see modest increases in short term yields, but the real action is going to be on the long end of the curve.

Regardless of what the Fed does short term, I think there is a long term re-anchoring of inflation expectations and credit risk that will continue to put upward pressure on long rates ... which has brutal implications due to duration.

I have no clue how high, how fast, etc but the bond bear market continues and extends further into the future.

At least that's what my crystal ball says!

 

[marko]

The way I read it is when the 10 year bond starts out at X the return on stocks has historically been Y.
sure, that range is less, but still pretty good in my book. I guess my point is you wont see a chart like this as the leading news story because that isn't what sells. And it debunks , with data, the narrative that higher rates spell doomsday for stocks.

OK but WHY? What's the mechanisms driving that? It seems counterintuitive.

 

[FREE866]

OK but WHY? What's the mechanisms driving that? It seems counterintuitive.

Great questions
I think markets move for a myriad of reasons and I think investors want explanations eg “ if this then that” and it’s just not that simple. Ken Fisher actually uses that word “ counterintuitive “ often to explain market moves and it is pretty confounding. So , no I don’t have the answers!

 

[USGrant1962]

OK but WHY? What's the mechanisms driving that? It seems counterintuitive.

Look at it the other way around. Why would companies increasing prices and outstanding debt being devalued (inflation) be bad for stocks?