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FOMC Meeting - Fed's Policy Remains Unchanged


I'm a little late with the news on the FOMC statement that was released yesterday, but since there were no surprises, I wasn't in a hurry. The Fed did have some positive statements about the economy, but there are not enough improvements for any changes in their policies:
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

Regarding inflation, there are still no immediate worries:
The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.

An economist gave his opinion in this Barrons article that "The Fed is not going to hike anytime before mid-2010, at the earliest, and more likely 2011." I'm afraid low deposit rates will likely continue for some time to come.

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Angelo_Frank   |     |   Comment #1
Putting some funds out to 5 years to catch 4.00% APY, at Pentagon Federal C.U. for example, may not be a bad idea at this point. If one needs the income it's better than 1.00 - 2.00% APY for the next two years.
Anonymous   |     |   Comment #2
I agree. By then interest rates on CDs are sure to be much higher than today's rates. If they are not, we will be in way deeper economic depression than we think.
Anonymous   |     |   Comment #3
Guys, can't you see what the FEDs are doing! They don't want us to have an income out of savings. The whole idea from the FEDs perspective is to stop the banks from paying no more then around 2% interest. They want to be in CONTROL and not the free market and they want to play the game of follow the leader.
Such policies are disastrous over long run and produce unknown results, out of which will come destruction of the Dollar and inflation.
Anonymous   |     |   Comment #4
It seems to me I heard the word Hyper-inflation being shouted back in the early 70s when the price of oil was out of control during that time. Since then we have had periods of up and down cycles and even a warning of deflation. So nobody really knows what the future holds.

On one hand we have the Fed, in a sense, printing money which would lead to inflation and on the other hand we have extremely high unemployment which leads to low demand for goods and services causing deflation. And then we have Wall Street and the Feds manipulating the markets. Very Scary Scenario!