re: Money Market Interest going down?

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My banker let me know that 5% will be going away in 2024. They expect down to less than 4% by the end of 2025. You bank experts hearing anything? I would assume mortgage rates would go down also?

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A few things here:

1) bank “money market” accounts and “money market mutual funds” are two different things. The bank sets their own money market rate to whatever they’d like whenever they want to change it. A money market mutual fund is market driven, so until 90ish day rates start to pull back, you’re still going to get 5-5.3ish on those options.


2) there is a market expectation that rates will be going down. 6m treasuries are around 5.4%, while 12m treasuries are around 5.08%. That implies a couple rate cuts in that 6-12m window.


3) short term rates that the Fed controls and long term rates like mortgages are not very correlated. They may move in the same general direction during cycles, but the velocity of the movements and when they change aren’t very predictable. I believe longer term rates will be a bit stickier from here. I could see 10y treasuries getting back to 3.5 or so, but anything much more than that would be a bit surprising in the next 12-18m. Keep in mind the yield curve is still inverted - you’re getting more interest to stay short than you are to go long. It can revert back to “normal” without long term rates having to fall.