1. Thursday, September 13, 2012 - 12:16 PM
Thanks for posting. It's definitely more bad news for savers. I have more discussion in this blog post.
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Back to Financial News
Thursday, September 13, 2012 - 12:09 PM
Fed Announces Open-Ended Stimulus To Strengthen Economy
As expected, the punishment for savers will continue for years to come. No relief is in sight as QE is now "open-ended" in scope and length...
"To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015."
http://tpmdc.talkingpointsmemo.com/2012/09/fed-announces-open-ended-stimulus-to-strengthen-economy.php?ref=fpnewsfeed
"To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015."
http://tpmdc.talkingpointsmemo.com/2012/09/fed-announces-open-ended-stimulus-to-strengthen-economy.php?ref=fpnewsfeed
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3. Friday, September 14, 2012 - 8:22 AM
I'm not at all convinced this latest FOMC move is bad "across the board" for savers. For those with longish CD ladders, you might actually be pleasantly surprised over the next couple of years (see my recent comment on the Blog). Note the action on the Ten today (yields popping). The yield curve is markedly steeper today. Insofar as rates on 5-year CDs are tied more to the Ten (and the economy overall) than to MBS yields, I'll be a contrarian and suggest that this move may portend good news for folks in ladders, bad news for bond funds, and a mixed blessing for the economy (unless you're rooting for inflation).
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4. Friday, September 14, 2012 - 8:48 AM
Re: Bozo @ 3. Friday, September 14, 2012 - 8:22 AM
The rise in yield could be a temporary reaction, to the Fed announcement, as funds exit from Treasuries into equities. The first major international incident, or economic hic-cup in Europe, and the stampede will be back into the safe haven of U.S. debt instruments, lowering yields once again.
The rise in yield could be a temporary reaction, to the Fed announcement, as funds exit from Treasuries into equities. The first major international incident, or economic hic-cup in Europe, and the stampede will be back into the safe haven of U.S. debt instruments, lowering yields once again.
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