November 21, 2008 Update
The chart below shows that certificates of deposit (cd) as well as savings and money market accounts continue to hold up despite the weakening economy and the prospect of the Fed cutting rates to .75% or even .5%. We've been writing about this trend for some time and it has recently been picked up the main street business press. Both the Wall Street Journal and Bloomberg wrote last week about how bank's needs for cash were driving the rates on deposit products higher.
The chart does show though, that rates have been experiencing a very gradual decline since peaking in early October. If the Fed does cut by another 50 basis points down to .5%, as the markets seem to think it will, then it's hard to imagine that rates on savings accounts, cds, and money markets won't fall further.
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