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Getting Ready For A ‘Twist’ By The Federal Reserve

Tuesday, September 20, 2011 - 5:48 PM
Look for CD rates with maturities on the long-end to fall further after this move...

The Federal Reserve is expected to announce a plan on Wednesday to swap shorter-maturity government securities for longer-dated ones in another stab at jolting the slow-moving U.S. economy, analysts said on the eve of a key meeting.   

Getting ready for a ‘twist’ by the Federal Reserve - The Fed - MarketWatch

 
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ShorebreakShorebreak2,364 posts since
Apr 6, 2010
Rep Points: 12,590
1. Tuesday, September 20, 2011 - 6:13 PM
Perhaps Discover Bank thought the writing was on the wall. Its 10-year CD APY fell today from 3% to 2.50%.
3
Ken TuminKen Tumin5,441 posts since
Nov 29, 2009
Rep Points: 123,664
2. Tuesday, September 20, 2011 - 9:10 PM
This is designed to drive a knife in what's left of the savers who put their funds into certificates of deposit at banks and credit unions. Bernanke is under orders to force savers to place their money into riskier investments at the bequest of Wall Street. This is the last bullet he has to accomplish the deed. Make all rates flat out to 30 years and near zero as much as possible. That way it makes it useless to put funds into deposit accounts. Once Wall Street has all the funds they will pull the plug by shorting the markets. It's the largest transfer of wealth in the history of mankind and the wealthiest one percent will control all the wealth in the end. Welcome to the global oligarchy.
2
ShorebreakShorebreak2,364 posts since
Apr 6, 2010
Rep Points: 12,590
3. Tuesday, September 20, 2011 - 9:16 PM
It will be interesting to see how long Security Service and Randolph-Brooks credit unions in San Antonio Texas can keep bucking the trend with their three percent plus rates on 7-year certificates.
1
ShorebreakShorebreak2,364 posts since
Apr 6, 2010
Rep Points: 12,590
4. Wednesday, September 21, 2011 - 9:18 AM
Please comment on this train of thought: Under the Twist program being considered, the Federal Reserve would sell some of its inventory of short term (0-5 years) treasury bonds and use the proceeds to buy longer term treasury bonds like 30 year ones. The sale of short term bonds would reduce the price of the bonds and raise their yields. Would this raising of the short term treasury bonds yields have any impact on the interest rates offered by banks on their 0-5 year CD's?
1
mvboschmvbosch7 posts since
Apr 5, 2011
Rep Points: 28
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