Wednesday, August 15, 2007

Get Ready for Lower Money Market Rates

An interesting thing has happened in the past few weeks. Short term interest rates have dropped, in some cases significantly. The one month treasury bill yielded 5.05% at the beginning of the month, as of today's close (8/15/07) it yielded 4.18 (dropping .44% today). The three, six, one year, and two year have also come down, though not quite as much. The effect of this drop will be felt in about a month. Money Market rates will, if rates don't change start dropping from above 5% to below, in some cases significantly below.

We just might be seeing a change in where the sweet spot on the yield curve is, I'll keep you posted.

Scott Dauenhauer CFP, MSFP, AIF