It is anybody’s guess. And there are a great many guesses out there now.
Mine is continued, very slow, increase in intermediate term rates. Base this on current employment news (shortage of workers).
So much more will be known in exactly four months. I would give anything to know today the outcome of the elections. Should Trump become hamstrung (if not outright impeached) by a Democrat Congress, I’m betting on level or even lower rates going forward from that outcome. If, instead, the American electorate chooses candidates who are (on the whole) tolerant of Trump, I would expect interest rates to continue upward.
The level of polarization today in America is so off the charts I really have no idea what is going to happen this November. Strategy is to keep aside as much dry powder as I can until then. If Trump is squished I will invest heavily in longer CDs as quickly as possible after November sixth. If candidates tolerant of Trump retain control I will be in no hurry to commit my funds following the election.
I have believed all along that CDs on the shorter side, but maturing out beyond the election, are traps. I see nothing but risk in, for example, a nine month CD or a one year CD, should Trump candidates come out losers in November. You could easily be left holding the bag in a less favorable interest rate environment. I want dry powder and I want it available on November seventh. Also, heck:
I can today get 2.4% at AgFed on liquid funds. Why should I reach out for another (less than) 1% with a CD that forces me into 2019? That “don’t make any sense” to me or for me. I guess it makes plenty of sense to the financial institutions since those are the kinds of CDs they are pushing hard right now.
ETA
Crazy. Hey, I just realized the June employment report will be released in the next twenty minutes!! Anybody looking to know where things are headed should keep a weather eye!!