CD Rates Defy Fed Cuts: Banks and Credit Unions Drive Yield Resilience — Seattle Bancshares, Inc. (CD Valet)

Event summary

CD rates rose 0.53% APY nationwide since February 2026, defying forecasts of Fed-driven declines.
Top 1% of CD rates now at 4.25% APY, with a flat yield curve across maturities.
750 financial institutions updated rates in the past 30 days, 75% increasing by 34 basis points.
Credit unions drove 63% of rate increases, while banks accounted for 37%.
CME FedWatch Tool shows 37% probability of a rate hike at the September 16 FOMC meeting.

The big picture

CD Valet’s data reveals that bank-specific funding needs, not just Fed policy, are the primary driver of CD rate resilience. This dynamic highlights the fragmented nature of deposit competition, where individual institutions adjust rates based on loan demand, deposit outflows, and regulatory pressures. The flat yield curve across maturities suggests savers have flexibility in term selection without sacrificing yield, a shift from earlier expectations of declining rates.

What we're watching

Bank Funding Needs: How individual bank deposit strategies will continue shaping CD rates independent of Fed moves.
Fed Policy Signals: Whether new Fed Chair Kevin Warsh’s Jackson Hole address will alter market expectations for September.
Saver Behavior: The pace at which savers adapt to shopping across institutions for optimal CD terms and rates.