Certificate of deposit rates continue their slide to the bottom, much to the chagrin of CD investors. Rates were down in most CD categories, as measured by the BankingMyWay National CD Rate tracker this week.

A listless economy and high demand for “safe” places to park investor cash continue to fuel the CD market slide, and don’t expect that situation to change any time soon.

Why? Because the Federal Reserve looks like it will open its wallet and buy billions in U.S. Treasury bonds to push bond prices higher and keep interest rates low. Look for the Federal Reserve to make that announcement after its next Open Markets Committee meeting on November 2nd and 3rd.

The Fed doesn’t see inflation as a major threat (more on that in a moment), but it does see deflation (falling prices and wages) as a big problem barreling down the turnpike. Thus the move to buy up Treasury bonds and keep rates low so businesses and individuals have easy access to money.

The deflation threat comes from the latest U.S. consumer price number, which rose 0.1% in September. The current CPI number is the lowest in 50 years, according to the U.S. Department of Labor.

"Over the last 12 months, the index for all items less food and energy rose 0.8%, the lowest 12-month increase since March 1961, with the shelter component down 0.4%,” the Labor Dept. said in an Oct. 15 statement. “The food index rose 1.4%, with both the food at home index and food away from home index rising the same 1.4%. The energy index rose 3.8% over the last year, with gasoline up 5.1%.”

Low levels of inflation are a big concern for economists, and a big threat to CD returns. Deflationary risks may result in low consumer demand and a weaker economy, as Americans have less money to spend. One example of “real world” deflation is the news from the U.S. Social Security Administration that that retirees will not receive a cost of living increase in their Social Security checks in 2011 – the second year in a row that’s happened.

News like that only feeds the deflationary beast. According to the Thomson Reuters/University of Michigan consumer sentiment index, consumer confidence is at its lowest level since Nov. 2009. As consumer confidence represents about two thirds of the U.S economy, government economic policy makers will unload every weapon at their disposal to get Americans spending again.

That won’t help CD investors, who are scraping the bottom of the proverbial peanut butter jar as it is.

Let’s look at this week’s CD rates, as calculated by the BankingMyWay Weekly CD Rate tracker:

Description                              This Week                   Last Week

60-Month CD                          1.672%                        1.693%
48-Month CD                          1.424%                        1.444%
24-Month CD                          0.895%                        0.917%
12-Month CD                          0.587%                        0.597%
6-Month CD                            0.389%                        0.390%
3-Month CD                            0.247%                        0.246%

With rates this low you really have to beat the bushes to find a decent deal. Start that process at BankingMyWay’s CD Rate Search. Week to week, it’s the most thorough review of bank CD rates in the market.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.