I had this same thought today.

IORB is less than 5

T-bill and every treasury yield is less than 5.

commercial paper less than 5.

interbank less than 5.

What could any bank issuing a 5% yield on a CD possibly be buying with that money to turn a profit with safe assets? Discount window is 5% and they might as well be just borrowing from the discount window. But of course, they're now able to leverage the face value of T-bonds but those still don't have those 5% yields ultimately.

So banks offering 5% on CDs must be getting some yield on something that is greater. Which seems like they're going to be riskier assets. If a bunch of money is tied up in less liquid assets, the chances of those riskier borrowers paying back those loans (or mortgages) could go down.

After some degrees of separation of asset purchases, it feels like the higher yields coming out of the crypto sector could be the culprit. But that could be this house of cards with all of the unsecured stablecoins. Or something. There definitely feels like something there.