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Fed Officials Intensify Effort To Curb Surge In Interest Rates

Friday, June 28, 2013 - 5:49 PM
The FOMC has said it will keep its benchmark rate close to zero as long as unemployment exceeds 6.5 percent and the outlook for inflation is no more than 2.5 percent.

Fed Officials Intensify Effort to Curb Surge in Interest Rates - Bloomberg

There will be no increase in deposit rate yields for a number of years folks.

 
16
ShorebreakShorebreak2,607 posts since
Apr 6, 2010
Rep Points: 14,124
1. Friday, June 28, 2013 - 6:31 PM
Ok.  If Obama will just bring the Keystone Pipeline thru the US we can get unemployment down with all the jobs it will produce and gas will be cheaper.  Sooooo there are ways to get interest rates UP and I will be optimistic no matter how many posts I force myself to not read from SB.  Rates CAN and WILL go up. 

There can be an increase in deposit rate yields folks.  Be optimistic !
8
paoli2paoli21,368 posts since
Aug 10, 2011
Rep Points: 5,995
2. Saturday, June 29, 2013 - 12:39 PM
Why Rising Interest Rates Won't Benefit Savers

"For savers, there’s really nowhere to hide. Rising rates on Treasury bonds make those a slightly better investment, yet most people buy Treasuries through bond mutual funds, which stand to lose money as rates go higher. Investors who buy bonds directly will benefit from the rise in interest payments, but only if they hold the bond for the duration of the note. It’s also possible rates could drift back down as investors get more comfortable with the prospect of a Fed pullback, which would make bonds paying current rates a good investment. But that would require the kind of risk-taking conservative savers usually prefer to avoid."

"Part of the Fed’s overall strategy has been to push interest rates so low that traditional, risk-averse savers move their money out of “safe” assets into riskier, higher-returning investments such as stocks. That seems to be one part of the strategy that hasn’t really changed. Die-hard savers can complain all they want about Bernanke & Co., but fighting the Fed still doesn't look like a smart financial move."

http://finance.yahoo.com/blogs/the-exchange/why-rising-interest-rates-won-t-benefit-savers-191034426.html
10
ShorebreakShorebreak2,607 posts since
Apr 6, 2010
Rep Points: 14,124
3. Saturday, June 29, 2013 - 4:24 PM
"Part of the Fed’s overall strategy has been to push interest rates so low that traditional, risk-averse savers move their money out of “safe” assets into riskier, higher-returning investments such as stocks. That seems to be one part of the strategy that hasn’t really changed. Die-hard savers can complain all they want about Bernanke & Co., but fighting the Fed still doesn't look like a smart financial move."

This logic does not make much sense.  With the recent market instability, even equity iinvestors (like me) are reducing stock coverage to be conservative.  Benanke &Co. naively think that people (both savers and equity investors) will blindly put their money in the stock market and suffer a heart attack (due to the ups/downs of the market); people are smarter and more prudent than they wishfully imagine. 
5
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
4. Saturday, June 29, 2013 - 6:19 PM
Re: 51hh @ 3. Saturday, June 29, 2013 - 4:24 PM

"This logic does not make much sense."

Of course it doesn't make ANY dense 51hh. Endless QE and ZIRP will just blow-up in their faces. This will occur after Bernanke leaves and Yellen takes over. The last fiasco occurred after Greenspan departed and Bernanke became Fed Chairman. SNAFU.
7
ShorebreakShorebreak2,607 posts since
Apr 6, 2010
Rep Points: 14,124
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