NEW YORK (MainStreet)RateWatch, a premier banking data and analytics service owned by TheStreet, Inc. (NASDAQ: TST) reported today that national averages for 6-month CD rates dipped incrementally this week, while all other CD rates generally remained unchanged at record-low levels. In Dallas annual percentage yield (APY) of 1 month CDs dropped from 0.07% last week to 0.06% this week, and the APY of 2 year CDs dropped from 0.43% to 0.42%.
That compared, regionally, to Boston and New Haven, which witnessed similar drops in rates across many of the CD maturity dates offered. Philadelphia-area banks on average showed no changes.
"CD rates were effectively unchanged from a week ago as banks showed little motivation to lift yields on cash savings amid uncertainty of when the Fed will start tapering its monetary stimulus," said Joe Deaux, TheStreet's Economist. "Economists and analysts are mixed on when they expect the central bank to scale back its monthly purchases in mortgage-backed securities and longer-term Treasuries, as some expect it as early as September and others anticipate action in late 2013."
The fact that it's the hustle bustle time of back-to-school in Dallas may explain the slight drop as banks try to win more deposits, according to Frank Anderson, a senior lecturer in finance at The University of TexasDallas Naveen Jindal School of Management.
"There does appear to be a higher level of business activity in the Dallas area and, when combined with being one of the most highly competitive banking markets in the U.S., most likely contributes to the slightly overall level or rates," he said.
The global political situation, though, may have more of an effect on the stagnant rates.
"Investors are retreating from the stock market due to the crisis in Syria on the stock market," said Eliezer Fich, associate professor of finance at Drexel University's LeBow College of Business in Philadelphia. "However, CD rates at ridiculously low levels will prompt many of those investors to get back into the stock market."