Many certificates of deposit are paying 5% or more. What will happen to CD rates in 2023?
CD rates have been notably competitive since the Fed began raising interest rates in March of 2022 — with a number paying 5% or more .
CME Group — a financial company that operates financial derivatives exchanges including the Chicago Mercantile Exchange, New York Mercantile Exchange and The Commodity Exchange — reveals that markets are placing less than 10% odds on a Federal Reserve rate hike in September. Come November and December, the probability of a rate hike is at a third or less according to CME Group. In other words, there’s a chance of higher rates but it’s not nearly as high as it was earlier this year.
Given these predictions, it’s likely that rates won’t get much higher than they are currently, many pros believe. “For maturities longer than one year, now is the time to lock in. Yields are at, or near, a peak. For maturities of one year and less there may be some additional yields to come if the Fed hikes rates further, but that’s kind of a wait-and-see thing,” says Greg McBride, chief financial analyst at Bankrate.
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