About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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No FOMC Policy Changes, Fed Cites Some Economic Improvements


No FOMC Policy Changes, Fed Cites Some Economic Improvements

It was three years ago when the Fed first slashed the federal funds rate to near zero. In today's meeting, the Fed continues to hold the rate to near zero. As expected, there were no policy changes or new stimulus.

The Fed did upgrade some of its language recognizing improvements to the economy. For example, in today's press release it stated that the "economy has been expanding moderately". As a comparison, in the November statement it said that "economic growth strengthened somewhat in the third quarter". However, the Fed still says "unemployment rate remains elevated" and "longer-term inflation expectations have remained stable". In addition, it warns that "global financial markets continue to pose significant downside risks." In short, there are no signs that the Fed may change its mid-2013 pledge which it reiterated again today:

The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.

There had been speculation that the Fed was planning to provide more transparency of the probable path for the Fed funds rate. There were no signs of that today. Perhaps we'll see some signs of this in their next meeting in January.

One last interesting thing to note about the FOMC statement today was that there was one dissenting vote. It was the same as the last meeting with Charles Evans wanting to see more policy accommodation.

Finally, don't be too tough on Bernanke. Today happens to be his 58th birthday.

Effects to Deposit Account Rates?

With no new policy accommodation announced today, we shouldn't see a new wave of rate cuts at banks like we saw after the Fed's mid-2013 pledge when several banks cut savings account rates and CD rates. However, I wouldn't be surprised to see the continuation of a trickling of rate cuts like we have seen for most of this year. Until we see signs that the Fed is getting ready to tighten, I doubt we'll see much improvements in deposit rates.

Future FOMC Meetings

The next three meetings are scheduled for January 24-25, March 13 and April 24-25.

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Stewie   |     |   Comment #1
"Finally, don't be too tough on Bernanke. Today happens to be his 58th birthday." 

Another reason to go easy on Helicopter Ben is that even he has been affected by the housing downturn.  According to The Wall Street Journal, his three-bedroom, 2,100-square-foot  townhouse near the Capitol was purchased in 2004 for $839,000. It's now worth a measly $11,000 more.
Anonymous   |     |   Comment #2
Wow!  Just $11,000.00??  What did he do to it?  Trash it after he read how many people were disgusted with him and his financial policies?  How I wish this was not a joke and his own policies came back to bite him in the "butt"!  When his policies began to get personal, then, maybe we will see it change for the better.  Lots of luck!

Anonymous   |     |   Comment #4
Must be Bernanke and the Feds feel they have not drained all of us retirees savings accounts dry yet.  "No change in policy"  Still a few bucks to get!
no stock 4 me
no stock 4 me   |     |   Comment #5
Really Hmmmm so how's those 0% rates workin out again?

So who is spending? the un-employed aren't, except on the usual bills, the workin poor spend the same, the lower 99% are savin as best they can and the retirees are seein their savings sittin still so they sure can't keep spendin except for the usual bills.

I remember being told about the 3 stools, SS, savings, and a pension (if your lucky to have one) well with 0% on savings one of the legs aren't there now for retirees so they aren't spending.

The only ones I see spending are the clowns who can't do with out a new Iphone every time it comes out, or the upper 99%'ers

(BTW I saw a blog that said the 99% is income up to 500K a year, are you S--tin me!, **** than what are people at 50K a year doin in the 99% , smirks)

So again my little SOB (Smart Old Banker) Bernak how's those super low rates on savers workin out for ya?
51hh   |     |   Comment #6
I think that they (FOMC) are making it up as they go along. They may be more clueless than we are.

There is no sense of accountability or creditability nowadays. 

I will change low-rate policy to "till 15th December 2020 exactly" instead of "through mid-2013"; hey nobody knows whether I have the authority or background for such prediction anyway:D
Anonymous   |     |   Comment #7
They tell us that low interest rates are "for the greater good". Funny.....I think the communists said that exact same thing many times in history.  But why worry? I can't think of any problems that came from communism!  All is well....move along.....nothing to see here.
Shorebreak   |     |   Comment #8
The market sure liked his comments. NOT!
Anonymous   |     |   Comment #10
As long as Bernanke is Chairman, the interest rates will be near 0%.
Don’t count on mid 2013 for something to happen, that is code name for more to come, he never said that the rates will go up, he said “AT LEAST” today, again, in his speech .
Anonymous   |     |   Comment #11
According to my estimates, when Bernanke took over the FED, until today,
I lost over $30,000 in interest alone.
I used to earn 5.5% average interest rates on my money, now my average is a pitiful rate of
Because of that, I stop spending money on nights out, movies, lattes, vacations, driving, newspapers and magazines, new clothing and so on.

When you multiply my life styles change, with millions like me, well, there goes the economy down the drain. It will never come back, until we start getting better return on our savings.
Since Bernanke already depressed the economy to accommodate the financial system, now, there is no hope for the millions of people who lost their jobs.

Low rates are chocking the economy and not the other way around. It shows you, how unexperienced and narrow minded our politicians are, including Bernanke.

Artificial stimulus is only temporary fix or while the money last, after that we go back where we started from and a full circle repeats itself with more borrowed money from China, until one they we will be paying more in interest than the whole US budget is.
Anonymous   |     |   Comment #12
Re: Anonymous 7

"for the greater good" means "for the super wealthy crooks in the banking and financial industies".
Shorebreak   |     |   Comment #14
RE: Anonymous - #13, Wednesday, December 14, 2011 - 11:17 AM

If you are going to trash a poster on this site, at a minimum learn how to spell, or download a spell checker. I'm just wondering who really is "brainwashed". Have a nice day.
Anonymous   |     |   Comment #15
Oh grate .....the speling polease !
Anonymous   |     |   Comment #16
That's funny, I didn't read anything in #12's post that said anything about stealing money from the hard working risk takers to give to bums and homeless people.


Anonimous #13 must be a brainLESS TROLL!