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This week we have seen dramatic drops in interest rates. The reason - investors have moved back into the bond markets. The Federal Reserve has announced several surprising moves this week, designed to bring more liquidity to the credit markets.

Such government efforts to stimulate the economy might under normal circumstances be viewed as inflationary, which would tend to push rates higher.

This has not been the response.  Investors recognize that the Federal Reserve actions are required by a struggling economy. With the economic picture looking tough for the foreseeable future, interest rates could very well continue to lower.

This week's Federal Reserve actions include Monday's speech suggesting a second economic stimulus package and today's plan to purchase CD's and money market funds. Both of these actions are intended to help investors and banks feel confident in continuing to ease the credit markets.

For more expert information and commentary, look at the Daily Lock Advisory.