The economic recovery, if you can call it that, is fragile and in danger of relapse if the housing, banking and manufacturing markets don’t begin to show stronger signs of life.

There are larger issues at play. Consumers aren’t spending. Home construction is weak. Millions of Americans are losing their homes to foreclosure. And unemployment is at 10.2% — and that’s not even counting part-time workers, freelancers, self-employed consultants and those who have simply given up looking for work.

It’s in that desultory environment where bank certificate of deposit rates are operating these days. The numbers, as measured by the BankingMyWay Weekly CD Rate Tracker, once again weave a sad story.

For the week, CD rates are down, albeit slightly, straight across the board. Three- and five-month CDs are down to 0.43% from 0.44%, and to 0.658% from 0.661%, respectively. One-year CD rates were down to 0.99% from 1%. Two-year CDs fell to 1.43% from 1.47%, while four-year models slid to 1.92% from 1.98%.

You can’t blame CD investors for giving up. The landscape hasn’t looked this bleak in years.

One move that might have given investors hope may be falling by the boards, as well. During the past few weeks the Federal Reserve has indicated that it would stop its mortgage-backed security purchase program in March 2010 — thus handing the mortgage securities market back over to the private sector. But St. Louis Federal Reserve chairman James Bullard has come out and said the Fed should extend the buyback program.

But the end of the $1.25 trillion mortgage purchase program was a milestone that rate investors were cheering. Once the Fed left the mortgage market, the thinking goes, the more inclined it would be to acknowledge that the economic danger had genuinely passed. That would likely compel the Federal Reserve to lift the lid off interest rates, thus driving bank CDs upward.

But in pushing for an extension, Bullard seems to be admitting that the economy is still in peril, and that the buyback program was needed to help the mortgage market should the economy relapse.

At his speech sponsored by Princeton University Bullard said, "I'd hate to get the feeling that the Fed is saying our work is done [after the program's end date]."

Bullard also said that the Federal Reserve historically has waited 2-3 years to raise interest rates after a recession. If you peg the recession's start at mid-2008, that would mean the Fed wouldn’t raise rates until 2011 — or maybe even 2012.

If you don’t want to wait that long for good CD rates, hop over to and check out the CD Rate Search engine. It’s your best bet in finding good rates during these troubling times.

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