Latest Liquid Bank Account Rates
Fed Meeting: Fourth Straight 75-bp Rate Hike - Strategies for Savers
November Savings Bond Rates - Composite I Bond Rate of 6.89%
Federal Reserve, the Economy and CD Rate Forecast - Oct 25, 2022Latest Liquid Bank Account Rates
The December Fed meeting is just two weeks away. The highest odds are for a 50-bp rate hike, but those odds have fallen a bit from two weeks ago. Currently, the odds of a 50-bp rate hike are 77.0%, down from 83.0% two weeks ago. The odds of a 75-bp rate hike are now 23.0%, up from 17.0% two weeks ago (Odds are based on the CME FedWatch Tool.)
This Thursday, October PCE inflation data will be released (PCE is the Fed’s preferred inflation gauge,) and this Friday, the November employment report will be released. If this data surprises on the upside, it could push the Fed to hike 75 bps. However, based on the minutes of the November FOMC meeting and today’s speech by Fed Chair Powell, I think a 50-bp rate hike is by far the most likely outcome. Hot inflation or jobs data may impact future Fed meetings.
For next year, the highest odds are for the target federal funds rate (TFFR) to reach a maximum of 5.00%-5.25% in the first half of the year, a total gain of 125 bps from the current level. The odds that it’ll be higher by June 2023 are just 13.8%. The Fed is then expected to pause and keep rates at this peak level for some time. Fed officials have warned that we should expect a long pause, but the markets don’t think it’ll be too long. The odds that the TFFR will be below 5.00%-5.25% by December 2023 are close to 91%.
I reviewed my old bank deals summary from November 2006 when the TFFR was 5.25%. The highest savings account yield was 5.50% (at E-LOAN). The money market account at GMAC Bank (now Ally Bank) had a yield of 5.25%, and the savings account at ING Direct (now under Capital One) had a yield of 4.40%. So we may see 5% savings accounts next year, even from a few of the major online banks. However, as we currently see, the major online banks haven’t been in a hurry to keep up with the Fed.
Instead of chasing the highest savings account rate, it may make more sense to prepare yourself to jump on any hot long-term CDs that come up. If a serious recession does occur, rates may again fall to near zero. Locking in a long-term CD before rates fall would be ideal, but as we’ve seen recently, long-term CD rates may fall long before the first Fed rate cut.
From the November 2006 bank deals summary, the highest 5-year CD yield was 5.82% (at Melrose Credit Union). The highest at a bank was 5.75% (at E-LOAN).
In October, the average online savings account yield finally exceeded the peak average in 2019 (2.23%). In the last month, the average increased almost 31 bps to 2.42%. I expect that it’ll be just above 3% when December starts. That’s disappointing when the TFFR is now 3.75%-4.00% and is expected to rise to at least 4.25%-4.50% in two weeks. The online savings account average is based on the Online Savings Account Index. This index tracks the average rate of ten well-established online savings accounts.
I’ve listed the most noteworthy rate changes that have occurred in the last two weeks. There are two lists. The first list includes rate changes from the major online banks or online banks that have a long history. The second includes rate changes from online banks which are generally not well-known names.
The number of rate increases went down quite a bit as compared to the number from two weeks ago. Two weeks ago, there were so many rate hikes that I had to limit the non-major bank list to those that had raised yields to at least 3.50%. This week I lowered the threshold to just 3.00%. Even with this lower threshold, the number of rate hikes are less than a third of the number from two weeks ago. One reason may be that many banks early in the month were responding to the November Fed rate hike. Also, many banks took a break during Thanksgiving week. Nevertheless, this decline in rate hikes still appears worse than what should be expected with another big Fed rate hike just two weeks away.
All percentages are APYs.
Rate changes from the major online banks:
- CIT Bank Savings Connect (3.25% → 3.60%)
- Citi Accelerate Savings (3.10% → 3.25%)
- Live Oak Bank Online Savings (2.75% → 3.10%)
- SFGI Direct Savings (2.51% → 3.01%)
- American Express National Bank HY Savings (2.75% → 3.00%)
- Ally Bank Online Savings & MM (2.75% → 3.00%)
- FNBO Direct Online Savings (2.15% → 3.00%)
Rate changes from the less well-known CUs & online banks:
- American First CU via SaveBetter MMDA (3.50% → 4.00%)
- Patriot Bank via SaveBetter MMDA (3.65% → 4.00%)
- Blue FCU via SaveBetter MMDA (3.65% → 3.75%)
- SkyOne FCU via SaveBetter MMDA (3.25% → 3.75%)
- FACILE MMA (3.25% → 3.75%)
- Valleydirect Online Savings (3.50% → 3.60%)
- My Banking Direct HY Savings (3.15% → 3.55%)
- Popular Direct High-Rise Savings (3.25% → 3.35%)
- Quontic Bank HY Savings (3.00% → 3.20%)
- Stopped at 3.00% APY
Current rate leaders
There were no new top rates in the last two weeks. The top APY for savings and money market accounts is still 4.01%. That’s still available from the money market account at Brilliant Bank, the online division of Kansas-based Equity Bank. This was reached on November 10th when yield increased from 3.60% to 4.01%.
Even though Brilliant Bank rates have remained competitive, it’s not the most saver friendly account. There’s a $2k minimum balance to avoid a $10 monthly service charge. Its ACH bank-to-bank transfer service is weak with a $5k daily/monthly limit on outgoing/incoming ACH transfers initiated by Brilliant Bank. In addition, there is a $2.55 charge for external transfers initiated by Brilliant Bank.
Republic Bank has also maintained its 4.00% APY on its Digital Money Market account. Like Brilliant Bank, Republic Bank has a monthly fee if a minimum balance isn’t maintained ($2.5k minimum balance to avoid $25 monthly maintenance fee.) Also like Brilliant Bank, its ACH transfer service is weak. Outgoing ACH transfers initiated by Republic Bank are limited to a low $2.5k per day and $10k per 30 day rolling cycle.
Three new institutions have raised the yields of their money market accounts to 4.00% APY.
The first is the Mega Money Market accounts at All America Bank and its internet banking division, Redneck Bank. The Mega Money Market now earns 4.00% APY on balances up to $75k. The portion of the balance above $75k only earns 0.50%. The balance cap increased from $50k, but the cap is still not high enough for these MMAs to be moved into the main list. These MMAs remain in the Reverse Tier list in which smaller balances earn the highest rates.
The other two institutions to reach 4% are offering their money market accounts on the SaveBetter.com platform.
The first to reach 4% was American First Credit Union. It’s offering a Money Market Deposit Account through the SaveBetter.com platform with a 4.00% APY on all balances of $1 and above.
The other one on SaveBetter just reached 4% today. It’s Patriot Bank N.A., and its Money Market Deposit Account also has a 4.00% APY on all balances of $1 and above.
It should be noted that the SaveBetter Money Market Deposit Accounts are no different than the High Yield Savings Accounts. Both lack check writing capability. One important downside with SaveBetter savings and money market accounts is that all transfers must be initiated through the SaveBetter platform. You cannot initiate transfers from your other banks. I have more details in my early review of SaveBetter.
Rate guarantees without withdrawal penalties
With rising rates, promotional savings accounts with a rate guarantee period aren't of much value. However, at least rate guarantees provide certainty that rates won’t fall soon after you open the account. That’s important for banks that don’t have a long track record with high-yield savings accounts.
No-penalty CDs are also of less value during rising rates, but if they have a higher rate than your online savings account, you can use the no-penalty CD to boost your overall yield without losing any significant liquidity. You just have to make sure you monitor rates so that you can close the no-penalty CD and move the funds into a higher-rate savings account or new no-penalty CD.
Some banks like CIT Bank and Ally Bank make it easy to open and close the no-penalty CDs. You just lose access to the money in the no-penalty CD for the first six days from account funding. After that, you are free to close the CD without penalty
The top rate for No Penalty CDs continues to be the 14-month No Penalty CD from Sallie Mae Bank via the SaveBetter platform. The yield increased from 3.75% to 4.05% APY just a day after the last summary. Sallie Mae Bank also has the second place spot with its 10-month No Penalty CD via SaveBetter (4.00% APY). One recent change to these CDs is that you now must wait at least 30 days after opening to be able to do a penalty-free early withdrawal. Previously, you only had to wait 7 days, which is the minimum time required by banking regulation.
Just behind Sallie Mae Bank is USALLIANCE Financial Credit Union. It increased its 11-month No Penalty CD yield by 100 bps to 4.00% APY.
Two other recent rate hikes were from CIT Bank and Ally Bank. Today, CIT Bank increased the yield of its 11-month No Penalty CD by 35 bps to 3.65% APY. Ally Bank increased its 11-month No Penalty CD just after the last summary by 20 bps to 3.30% APY.
Money Market Funds
Another option for your cash instead of savings accounts and money market accounts are money market funds from brokerages. These don’t have FDIC coverage, but they can be reasonable alternatives to deposit accounts. Their rates tend to be close to zero when the Fed sets the target federal funds rate to 0%, and they tend to follow the target federal funds rate during a rate-hiking cycle.
Before March, the four money market funds that I have followed have maintained a 7-day yield of only 0.01%. Now that the Fed has been hiking rates, money market fund yields are rising, and their yields are generally rising faster than online savings account yields from the major online banks.
Fidelity still has a slight yield advantage over Vanguard. Today, the Fidelity Money Market Fund 7-day yield was 3.69%, up slightly from 3.66% two weeks ago. The Vanguard Federal Money Market Fund 7-day yield was 3.68%, up from 3.59% two weeks ago.
Municipal money market fund yields have been up and down even as the Fed keeps hiking. Yields have fallen for the last month. The Vanguard Municipal Money Market Fund 7-day yield is now 1.73%, down from 1.97% two weeks ago. The 7-day yield of the Fidelity Municipal Money Market Fund is now 1.63%, down from 1.89% two weeks ago.
Reward Checking Accounts
For the nationally-available reward checking accounts, there were just two noteworthy rate increases in the last two weeks. Reward checking accounts have a history of being slow to respond to rising rates, especially when compared to online savings accounts.
All America Bank and its internet banking division, Redneck Bank, increased the yields of their Rewards Checking Accounts from 3.30% to 4.25%. In addition, the balance caps were increased from $10k to $15k.
To find the highest reward checking rates and balance caps in your state or nationwide, please refer to our reward checking rate table. If you're new to reward checking, please refer to my blog post, Overview of Reward Checking and Our Reward Checking Table.
Certificate of Deposit Rates
I publish my CD survey as a separate post. Please refer to my survey of the best CD rates. This recap focuses on liquid accounts, but I’ll include a few of the best CD deals since rates are rising fast.
CD Deals: For direct CDs that are nationally available (without any membership limitations), there are still 5% CDs available.
There are now two CDs available from the SaveBetter platform with a 5% APY. The new one is a 27-month CD from Sallie Mae Bank. Unlike most of the CDs on SaveBetter, this one has a more mild early withdrawal penalty (only 180 days of interest).
The other 5% SaveBetter CD is a 22-month CD from SkyOne Federal Credit Union. This one has the typical SaveBetter early withdrawal penalty for terms from 12 to 60 months (270 days of interest).
One important attribute to note regarding SaveBetter CDs is that there is no option to withdraw interest. Interest can only be added back into the CD. To access any of the CD balance requires a closure of the CD with an early withdrawal penalty. SaveBetter’s product term sheets for the CDs don't clearly describe this. Under “transaction limitations”, it only states that “One-time full withdrawal of the Certificate.”
For nationally available CDs, the only other 5% CD is a 7-month CD promotion from Andrews Federal Credit Union (see post). Maximum deposit is $100k. This is scheduled to end on Friday (12/2/2022).
As you can see with these 5% CDs, the longest-term CDs no longer have the highest rates.
One example is at Synchrony Bank. Its highest rate CD is its 19-month CD Special that earns 4.75% APY. That’s 45 bps higher than the yields of its 24-, 36-, 48- and 60-month CDs.
Another example is at Connexus Credit Union. Its highest rate CD is its 15-month CD Special that earns 4.85% APY. The yield of its 4- and 5-year CDs is only 3.51%.
The highest 5-year CD yield is currently 4.80% APY at Department of Commerce Federal Credit Union. This requires a $25k minimum deposit. The yield falls to 4.70% for smaller deposits. These yields are also available on terms up to 84 months.
The highest 5-year CD yield at a bank is 4.75% APY. This is currently available from Bread Financial.
A couple of banks that had long-term CD rates near 5% have pulled back. KS StateBank was offering 4.99% APY on 3-, 4-, 5- and 7-year terms. Now it’s only offering 4.47% APY on those terms. Merrick Bank had reached 4.75% APY on its 5-year CD earlier in November. Within about a week, the rate fell to 4.60% APY.
For brokered CDs, it’s even worse. It’s now hard to find non-callable new-issue 4- and 5-year CDs. If you do find one, the yield will likely be disappointing. For example, today I checked Fidelity, and there was just one non-callable 5-year CD listed, and its rate was only 4.00%.
It’s hard to know when CD rates will peak. It’s possible that we may already be past the peak for long-term CD rates. Falling long-dated Treasury yields don’t bode well for long-term CD rates. The 5-, 7- and 10-year Treasury yields continue to be under 4%. At yesterday’s market close, the 5-, 7- and 10-year yields were 3.92%, 3.85% and 3.75%, respectively. The yield curve is now deeply inverted with short-dated Treasury bills offering the highest yields. At yesterday’s market close, the 3-, 6- and 12-month Treasury yields were 4.38%, 4.72% and 4.78%, respectively. These yields are based on Daily Treasury Par Yield Curve Rates.
Since my Fed review is no longer weekly, I touched on Fed and economic issues at the start of this post. Please keep discussions of the Fed and the economy to a minimum in the comments of this post. The focus of the comments should be deposit accounts and rates.
Checking/Savings/Money Market Accounts:
- Best Savings Account Rates (Nationwide and by State)
- Best Money Market Rates (Nationwide and by State)
- Best Checking Account Rates (Nationwide and by State)
| Institution | APYs | Notes |
|---|---|---|
| Brilliant Bank | 4.01% ($1k min) | Money Market Account Internet bank, deposits held by Equity Bank - Account review |
| CFG Bank | 4.00 ($1k) | High Yield Money Market Account - Account review |
| Patriot Bank | 4.00% ($1 min) | Money Market Deposit Account via SaveBetter - Account review |
| American First Credit Union | 4.00% ($1 min) | Money Market Deposit Account via SaveBetter - Account review |
| Republic Bank of Chicago | 4.00% ($2.5k min opening) | Digital Money Market (not available in IL, IN, MI, or WI) - Account review |
| UFB Direct | 3.91% | UFB High Rate Money Market - Account review |
| UFB Direct | 3.91% | UFB High Rate Savings - Account review |
| First Internet Bank | 3.87% ($1m+), 3.04% (up to $1m) | Money Market Savings |
| Bask Bank | 3.85% (no min) | Bask Interest Savings Account - Account review |
| ConnectOne Bank | 3.85% ($250k+), 3.75% ($2.5k) | Connection Plus Savings - Account review |
| Merchants Bank of Indiana | 3.82% (up to $1m) | Money Market Account |
| FACILE | 3.75% | Money Market Account - Internet bank, deposits held by Pacific National Bank |
| SkyOne Credit Union | 3.75% ($1 min) | Money Market Deposit Account via SaveBetter - Account review |
| Blue Federal Credit Union | 3.75% ($1 min) | Money Market Deposit Account via SaveBetter - Account review |
| BrioDirect | 3.75% ($500 min) | High-Yield Savings Plus - Account review |
| Third Coast Bank | 3.70% ($1 min) | High Yield Savings via SaveBetter - Account review |
| Lemmata Savings Bank | 3.70% ($1 min) | Money Market Deposit Account via SaveBetter - Account review |
| Continental Bank | 3.65% ($1 min) | High Yield Savings Account via SaveBetter - Account review |
| CFBank | 3.65% ($25k min) | Money Market, 6 month rate guarantee - Account review |
| TAB Bank | 3.64% ($1 min) | High Yield Savings - Account review |
| First Foundation Bank | 3.60% | Online Savings - Account review |
| First Foundation Bank | 3.60% ($5m max) | Online Money Market Account (*NTS) - Account review |
| The State Exchange Bank | 3.60% ($1 min) | High Yield Savings via SaveBetter - Account review |
| ValleyDirect | 3.60% | Online Savings - Internet bank, deposits held by Valley Bank |
| CIT Bank | 3.60% ($100 min) | Savings Connect - Linked eChecking required Account review |
| State Bank of Texas (SBT) | 3.56% ($100k min, new money only) | Jumbo Money Market |
| My Banking Direct | 3.55% ($1 min) | High Yield Savings - Account review |
| Idabel National Bank | 3.55% ($1 min) | Money Market Deposit Account via SaveBetter - Account review |
| Vio Bank | 3.52% | Cornerstone Money Market |
| DollarSavingsDirect | 3.50% | Dollar Savings Account - Account review |
| Salem Five Direct | 3.50% (up to $1m) | eOne Savings, new customers only - Account review |
| FitnessBank | 3.50% ($250k max) (Requires using step tracker app and averaging 12.5k steps/daily, extra 10 bps with checking and debit card usage) | Fitness Savings Account - Account review |
| Liberty Savings Bank | 3.50% ($1 min) | High Yield Savings via SaveBetter - Account review |
| mph.bank | 3.50% ($1 min) | Money Market Deposit Account via SaveBetter - Account review |
| Bread Financial (formerly Comenity Direct) | 3.50% ($100 min) | High-Yield Savings - Account review |
| Upgrade | 3.50% ($1k min) | Premier Savings (deposits held by Cross River Bank) Account review |
| Ivy Bank | 3.50% ($2.5k), 0.05% ($10) | High-Yield Savings - Account review |
| BankPurely | 3.50% ($25k min) | PurelyMoneyMarket - Account review |
| iGObanking.com | 3.50% ($25k min) | iGOmoneymarket, new accounts and new money only - Account review |
| ConnectOne Bank | 3.35% ($2.5k min) | OneConnection Savings - Account review |
| Ivy Bank | 3.35% ($2.5k), 0.05% ($10) | Indexed Savings - Account review |
| Popular Direct | 3.35% ($5k min opening) | High Rise Savings - Account review |
| CIBC Bank USA | 3.27% | Agility Savings Account - Account review |
| Synchrony Bank | 3.25% | High Yield Savings - Account review |
| Citi | 3.25% | Citi Accelerate Savings Account (Not available in all states, chk relationship required) |
| Affirm | 3.25% | Affirm Savings (deposits held by a partner bank) |
| LendingClub Bank | 3.25% | High-Yield Savings - Account review |
| E*TRADE from Morgan Stanley | 3.25% | Premium Savings Account (sweeps account) - Account review |
| Prime Alliance Bank | 3.25% ($1 min) | Personal Savings - Account review |
| Prime Alliance Bank | 3.25% ($1 min) | Personal Money Market - Account review |
| Ponce Bank | 3.25% ($1 min) | Money Market Deposit Account via SaveBetter - Account review |
| Northern Bank Direct | 3.25% ($5k min) | Money Market - Account review |
| Rising Bank | 3.25% ($1k min) | High Yield Savings - Account review |
| Northpointe Bank | 3.25% ($25k), 0.35% ($5k), 0.25% ($2.5k min) | Ultimate Money Market - Account review |
| Quontic Bank | 3.20% | High Yield Savings - Account review |
| Sallie Mae Bank | 3.20% | Money Market Account - Account review |
| Live Oak Bank | 3.10% ($5 million max) | High Yield Savings - Account review |
| Sallie Mae Bank | 3.10% | High Yield Savings - Account review |
| Smarty Pig | 3.10% | SmartyPig Savings - Account review |
| ConnectOne Bank | 3.10% ($25k), 3.00% (up to $$25k) | Connect Money Market - Account review |
| Customers Bank | 3.05% | High-Yield Digital Savings, active checking required |
| Lafayette Federal Credit Union | 3.03% ($250k), 2.52% ($150k), 2.27% ($100k), 2.17% ($50) | Premier Savings |
| SFGI Direct | 3.01% | SGFI Direct Savings Account - Account review |
| Connexus Credit Union | 3.01% ($1m), 2.91% ($500k), 2.51% ($250k), 2.01% ($100k), 1.50% ($20k), 0.25% ($1k) | Money Market Account (Active checking requirement has been removed) - Forum post |
| Ally Bank | 3.00% | Online Savings - Account review |
| Ally Bank | 3.00% | Money Market Account - Account review |
| FNBO Direct | 3.00% | Online Savings |
| Quontic Bank | 3.00% | Personal Money Market (all balances) - Account review |
| American Express National Bank | 3.00% | High Yield Savings - Account review |
| Discover Bank | 3.00% | Online Savings - Account review |
| USALLIANCE Financial | 3.00% ($500) | High Dividend Savings - Account review |
| Capital One | 3.00% | 360 Performance Savings - Account review |
| Barclays | 3.00% | Online Savings - Account review |
| M1 Finance | 3.00% (all balances, $125 annual fee) | M1 Plus Checking (deposits held by a partner bank) |
| Marcus by Goldman Sachs | 3.00% ($500 min) | High-Yield Online Savings Account (additional 10 bps for AARP members) - Account review |
| Western State Bank | 3.00% ($5k min) | High Yield Money Market - Account review |
| TotalDirectBank | 3.00% ($5k min) | Direct Money Market Deposit Account (not available in CA or FL) - Account review |
| Citizens Access | 3.00% ($5k min) | Online Savings Account - Account review |
| Langley Federal Credit Union | 3.00% ($1m), 2.50% ($500k), 1.80% ($250k min), 1.50% ($100k), 1.25% ($25k) | Platinum Money Market Savings - Account review |
| SoFi Bank, N.A. | 3.00% (w/direct deposit), 1.20% (w/o direct deposit) | SoFi Checking and Savings |
| Discover Bank | 2.95% ($100k min), 2.90% ($2.5k) | Money Market - Account review |
| Luana Savings Bank | 2.89% ($750k), 2.78% ($250k), 2.68% ($100k), 2.58% ($50k), 2.38% ($2.5k) | Money Market |
| American Heritage Credit Union | 2.85% ($10k min) | High Yield Savings |
| Virtual Bank | 2.84% | eMoney Market Special - Account review |
| Axiom Bank | 2.75% ($1 min) | High Yield Savings Account via SaveBetter - Account review |
| Spectrum Credit Union | 2.75% ($100k), 2.65% ($50k), 2.55% ($25k), 2.50% ($2.5k), 0.60% (<$2.5) | MarketEdge Money Market - Account review |
| CBN Bank Direct | 2.63% ($25k min/$2m max) | Premium Money Market - Account review |
| Sun East Federal Credit Union | 2.60% ($5k min) | MAX-Yield Money Market Account Special (13 month introductory rate), free withdrawals can only be done once per quarter - Account review |
| CBN Bank Direct | 2.53% ($1 min) | High Yield Savings - Account review |
| EmigrantDirect.com | 2.50% | AmericanDream Savings Account - Account review |
| Quorum Federal Credit Union | 2.50% | HighQ Savings Account |
| Alliant Credit Union | 2.50% ($100 min) | High-Rate Savings - Account review |
| The Federal Savings Bank | 2.50% ($2k min) | Online Money Market Promo - Account review |
| My eBanc | 2.48% ($5k min opening) | Super Saver Money Market Account - Account review |
| TIAA Bank | 2.45% ($25 min) | Basic Savings |
| CFSB (Colorado Federal Savings Bank) | 2.45% ($50k min) | Premier Savings (New customers) - Account review |
| Dow Credit Union | 2.42% ($500k), 2.24% ($100k), 2.05% ($50k), 1.59% (up to $50k) | Premium High Yield Deposit - Account review |
| CFSB (Colorado Federal Savings Bank) | 2.40% | High Yield Savings - Account review |
| Laurel Bank (a brand of KeyBank, N.A.) | 2.35% ($2m max) | Laurel Road High Yield Savings Account (NTS) - Account review |
| TIAA Bank | 2.25% ($100k), 2.00% ($50k), 1.75% (%25k), 1.60% (up to $25k) | Yield Pledge Money Market - Account review |
| Revolut | 2.25% | Savings Vault - subscription rate (deposits held by Metropolitan Commercial Bank) (*NTS) - Account review |
| T-Mobile Money | 2.25% (4.00% up to $3k w/checking requirements) | Checking Account (deposits held by a partner bank) (1.50% effective July 15, 2022) - Account review |
| Lafayette Federal Credit Union | 2.17% ($20k), 1.51% ($50) | Preferred Savings |
| Security State Bank (KS) | 2.09% ($110k), 2.00%-2.09% ($100k+), 0.75% (under $100k) | Investment Savings Account (linked Investment Checking required), APY is average of Savings and Checking, 0.60%+ APY assumes Savings balance of at least $100k - Account review |
| PenFed Credit Union | 2.00% | Premium Online Savings Account review |
| Synchrony Bank | 2.00% | Money Market - Account review |
| CommunityWide Federal Credit Union | 2.00% (penalty-free withdrawals first 5 days of each calendar quarter) | High Rate Quarterly Funds Account - Account review |
| Chime | 2.00% (no min/max, active checking required) | Chime Savings Account (deposits held by a partner bank) - Account review |
| Paramount Bank | 2.00% (up to $100k), 0.10% APY ($100k+) ($100 min deposit) | Interest Checking (non-reward checking) - Account review, $100k cap only applies to accounts opened after 3/24/21 |
| Veridian Credit Union | 2.00% ($1m) 1.80% ($500k), 1.60% (%250k), 1.50% ($100k), 1.40% ($50k), 1.30% ($25k), 1.15% ($10k), 1.00% ($2.5k) | Premier Money Market - Account review |
| Varo | 2.00% (5.00% up to $5k w/chk requirements) | Varo Savings - Account review |
| MapleMark Bank | 2.00% ($25k min opening) | Platinum Money Market - Account review |
| MainStreet Bank | 2.00% ($50k) 1.00% ($25k), 0.50% ($0.01) | Personal Super Savings Money Market ($2.5k min opening) - Account review |
| UmbrellaBank.com | 1.85% ($25k min), 0.21% ($1k) | Money Market |
| Amalgamated Bank | 1.75% | Online Savings (*NTS) - Account review |
| Bethpage Federal Credit Union | 1.75% ($500 min) | Money Market |
| CIT Bank | 1.55% ($100 min) | Money Market - Account review |
| MySavingsDirect | 1.50% | MySavings Account - Account review |
| Bank5 Connect | 1.50% ($100 min) | High Interest Savings - Account review |
| Customers Bank | 1.50% ($25k min) | Ascent Money Market Savings |
| Bellco Credit Union | 1.50% ($50k) 0.95% ($10k) | Premier Money Market Account |
| Banesco USA | 1.35% ($100 min) | BanesGrow Savings Account Account review |
| Banesco USA | 1.35% ($2.5k-$1m) | BanesFlex Money Market Account - Account review |
| ZYNLO Bank | 1.25% (up to $250k) 0.10% ($250k+) | Money Market - Account review |
| Vibrant Credit Union | 1.15% ($200k), 0.50% ($100k), 0.25% ($25k), 0.10% ($10k), 0.05% (up to $10k) | Yellow Money Market (promotional rate) |
| Andrews Federal Credit Union | 1.15% ($200k+), 0.85% (<$200k) | Prestige Money Market |
| State Department Federal Credit Union | 1.06% ($100k), 1.00% ($50k), 0.95 ($25k) | Premier Money Management Shares - Account review |
| NASA Federal Credit Union | 1.05% ($100k), 0.95% ($50k), 0.75% (up to $50k) | Premier Advantage Money Market - Account review |
| Vio Bank | 1.00% | Online High Yield Savings - Account review |
| Bank Onward | 1.00% ($250 opening deposit) | Bo Savings - Account review |
| SkyOne Credit Union | 1.00% ($1k min) | Sky-high Savings |
| State Bank of India (IL) | 1.00% ($5k min) | Money Market |
| CIT Bank | 1.00% ($25k min) | Savings Builder - Account review |
| Freedom Northwest Credit Union | 0.80% ($15k+), 0.65% ($10k+), 0.50% ($5k+), 035% (up to $5k) | Rise Money Market (checking account w/$15k min balance required, no online application, small credit union) - Account review |
| U.S. Postal Federal Credit Union | 0.75% (0.85% with relationship rewards) | IRA Savings - See review |
| BrioDirect | 0.70% | Money Market - Account review |
| State Bank of India (IL) | 0.60% ($500 min) | Savings Account |
| PurePoint Financial | 0.40 ($10k min) | Online Savings - Account review |
*New to Summary
No-Penalty CDs
| Institution | APYs | Notes |
|---|---|---|
| Sallie Mae Bank | 4.05% ($1 min) | 14-month No Penalty CD via SaveBetter - Account review |
| USALLIANCE Financial | 4.00% ($500) | 11-month No Penalty CD Special - Account review |
| Sallie Mae Bank | 4.00% ($1 min) | 10-month No Penalty CD via SaveBetter - Account review |
| CIT Bank | 3.65% ($1k min) | 11-month No-Penalty CD - Account review |
| Ally Bank | 3.30% (no min) | No-Penalty 11-month CD - Account review |
| Marcus by Goldman Sachs | 3.05% ($500) | 13-month No Penalty CD - Account review |
| Marcus by Goldman Sachs | 3.05% ($500) | 8-month No Penalty CD (AARP members only) - Account review |
| Synchrony Bank | 3.00% (no min) | 11-month No Penalty CD - Account review |
| MainStreet Bank | 2.75% ($500 min) | 1-year No Penalty CD (early closure only) - Account review |
| My eBanc | 2.69% ($100k), 2.58% ($10k) | 11-month Online Flex Time Deposit - Account review |
| Citi | 2.50% ($500 min) | 12-month No Penalty CD |
| Bellco Credit Union | 2.40% ($2.5k min) | 36-month Smart Move CD - Account review |
| CFSB (Colorado Federal Savings Bank) | 2.35% ($5k min) | 11-month No Penalty CD - Account review |
| Chartway Federal Credit Union | 1.50% ($500 min) | 12-month No Penalty CD (early closure only) - Account review |
| Marcus by Goldman Sachs | 0.45% ($500 min) | 7-month No Penalty CD - Account review |
| Marcus by Goldman Sachs | 0.35% ($500 min) | 11-month No Penalty CD - Account review |
| Investors eAccess | 0.15% ($500) | 6-month No-Penalty CD - Account review |
| PurePoint Financial | 0.15% ($10k) | 11-month No-Penalty CD - Account review |
| PurePoint Financial | 0.10% ($10k) | 13-month No-Penalty CD - Account review |
| PurePoint Financial | 0.10% ($10k) | 14-month No-Penalty CD - Account review |
Reverse Tier Savings/Money Market Accounts/Checking:
| Institution | APYs | Notes |
|---|---|---|
| Blue Federal Credit Union | 5.00% ($25-$1k), 1.00% ($1k-$5k), 0.50% ($5k-10k), 0.25% ($10k-$50k), 0.15% ($50k+) | Accelerated Savings (*NTS) - Account review |
| La Capitol Federal Credit Union | 4.25% (up to $3k), 2.00% ($3k-10k), 0.10% ($10k+) | Choice Checking |
| All America Bank | 4.00% (up to $75k), 0.25% ($50k+) | Mega Money Market Account - Account review |
| Redneck Bank | 4.00% (up to $75k), 0.25% ($50k+) | Mega Money Market Account |
| NuVision Federal Credit Union | 4.00% (up to $1k), 2.00% ($1k-5k), 1.00% ($5k-$10k), 0.50% ($10k-$25k), 0.20% ($25k+) | Advantage Choice Money Market |
| Workers Credit Union | 3.56% (up to $1k), 0.55% ($1k-$2k), 0.60% ($2k-$3k), plus 13 more rate tiers (0.65%-1.26% in 5 bps increments) | SaveUp Savings - Account review |
| Affinity Plus Federal Credit Union | 3.50% (up to $5k), 1.00% ($5k+) | SmartStart Savings (*NTS) - Account review |
| SafeAmerica Credit Union | 3.10% (up to $2k), 1.10% ($2k-$5k), 0.60% ($5k-$10k), 0.55% ($10k+) | Blended Rate Money Market |
| Porte | 3.00% (up to $15k), 0.20% ($15k+) | Savings Account, Checking with one-time direct deposit required (deposits held by a partner bank) - Account review |
| Michigan State University Credit Union | 2.25% (up to $1k), 1.42% ($1k-$2k), 0.56% ($2k+) | Savings Builder (*NTS) - Account review |
| Dover Federal Credit Union | 2.00% (up to $50k), 1.50% ($50k+), 1.25% ($100k+), 0.50% ($250k+) | High Yield Savings |
| Affinity Plus Federal Credit Union | 2.00% (up to $25k), 1.50% ($25k+) | Superior Money Market (min $500 direct deposit into any account) |
| Patelco Credit Union | 1.00% (up to $2k), 0.50% ($2k-$5k), 0.30% ($5k-$10k), 0.25% ($10k-$50k), 0.20% ($50k-$100k), 0.10% ($100k-$100m) | Money Market Select Account - Account review |
| Axos Bank | 0.61% (up to $25k), 0.25% ($25k to $100k), 0.15% ($100k+) | High Yield Savings - Account review |
*New to Summary
Reward Checking Accounts:
- Noteworthy Accounts Available Nationwide:
| Institution | APYs | Notes |
|---|---|---|
| Pelican State Credit Union | 5.11% (up to $10k), 1.00% ($10k+) | Kasasa Cash Account review |
| Consumers Credit Union | 5.00% (up to $10k), 0.20% ($10k-$25k), 0.10% ($25k+) | Rewards Checking Tier A- debit card and $1k credit card requirements (Changes effective May 2020) |
| All America Bank | 4.25% (up to $15k), 0.25% ($15k+) | Ultimate Rewards Checking |
| Redneck Bank | 4.25% (up to $15k), 0.25% ($15k+) | Redneck Rewards Checking |
| Garden Savings Federal Credit Union | 4.07% (up to $15k), 0.15% ($15k+) | Platinum Checking |
| Genisys Credit Union | 4.07% (up to $7.5k), 0.05% ($7.5k+) | Genius Checking Account review |
| Ideal Credit Union | 4.00% (up to $20k), 0.05% ($20k+) | High Yield Checking - Account review |
| Orion Federal Credit Union | 4.00% (up to $10k), 0.25% ($10k-$100k), 0.05% ($100k-$250k), 0.01% ($250k+) | Premium Checking - Account review |
| Consumers Credit Union | 4.00% (up to $10k), 0.20% ($10k-$25k), 0.10% ($25k+) | Rewards Checking Tier B- debit card and $500 credit card requirements (Changes effective May 2020) |
| Presidential Bank | 3.75% (up to $25k), 3.00% ($25k+) | Advantage Checking - Account review |
| Department of Commerce Federal Credit Union | 3.50% (up to $20k), 0% ($20k+) | Performance Checking Account review |
| Signature Federal Credit Union | 3.50% (up to $20k), 0% ($20k+) | High-Yield Checking |
| Liberty Federal Credit Union | 3.45% (up to $20k), 0.00% ($20k+) | Vertical Checking - Account review |
| Market USA Federal Credit Union | 3.25% (up to $15k), 0.05% ($15k+) | VIP Checking Platinum Tier - Account review |
| First Bank | 3.04% (up to $25k), 0.10% ($25k+) | First Performance Checking (available in CA, IL, MO) - Account review |
| EFCU Financial | 3.01% (up to $10k), 0.05% ($10k+) | Rewards Checking - Account review |
| Keesler Federal Credit Union | 3.00% (up to $25k), 0.40% ($25k+) | Kasasa Cash (easy membership in AL, LA, MS) - Account review |
| INOVA Federal Credit Union | 3.00% (up to $15k), 0.07% ($15k+) | Shield Checking - Account review |
| Western Vista Federal Credit Union | 3.00% (up to $15k), 0.03% ($15k+) | Panorama Checking - Account review |
| Lake Michigan Credit Union | 3.00% (up to $15k), 0.00% ($15k+) | Max Checking |
| Sullivan Bank | 3.00% (up to $10k), 0.30% ($10k+) | Cash Rewards Checking (available in AR, IA, IL, KS, KY, MO, NE, OK, TN) - Account review |
| Consumers Credit Union | 3.00% (up to $10k), 0.20% ($10k-$25k), 0.10% ($25k+) | Rewards Checking Tier C - debit card with NO credit card requirements (Changes effective May 2020) |
| Finex | 2.53% (up to $25k), 0.10% ($25k+) | Axcess Rewards Checking, Premier Account (formerly First New England Federal Credit Union) |
| Wings Financial Credit Union | 2.53% (up to $25k), 0.10% ($25k+) | High Yield Checking - Account review |
| Great Lakes Credit Union | 2.50% (up to $10k), 0.05% ($10k+) | Free Checking |
| Bellco Credit Union | 2.25% (up to $25k), 0.25% ($25k+) | Boost Interest Checking - Account review |
| Community Bank (TN) | 2.08% (up to $20k), 0.25% ($20k+) | Community Advantage Checking Account review |
| Union Bank | 2.07% (blended APY up to $25k), 0.03% ($25k+) | 1-2-3 Rewards Checking Account review |
| Heritage Bank | 2.02% (up to $25k), 0.14% ($25k+) | eCentive Checking Account |
| Hiway Federal Credit Union | 2.02% ($1k-$25k), 0.01% ($25k+) | Hi Yield Checking - Account review |
| TruStone Financial Credit Union | 2.02% (up to $20k), 0.10% ($20k+) | TruRate Checking - Account review |
| Expedition Credit Union (formerly United Educators Credit Union) | 2.02% (up to $10k), 0.10% ($10k+) | High Yield Checking |
| Campus Federal | 2.01% (up to $10k), 0.05% ($10k+) | Lagniappe Checking |
| Elements Financial | 2.00% (up to $20k), 0.10% ($20k+) | High Interest Checking - Account review |
| First State Bank (OH) | 2.00% (up to $15k), 0.25% ($15k+) | Kasasa Cash - Account review |
| Cap Ed Federal Credit Union | 2.00% (up to $10k), 0.10% ($10k+) | High Yield Checking |
| Connexus Credit Union | 1.75% (up to $25k), 0.25% ($25k+) | Xtraordinary Checking |
| Partner Colorado Credit Union | 1.75% (up to $10k), 0.50% ($10k-$25k), 0.25% ($25k+) | High Interest Checking |
| First Tech Federal Credit Union | 1.50% (up to $15k), 0.10% ($15k+) | First Tech Rewards Checking |
| Industrial Bank | 1.47% (up to $15k), 0.20% ($15k+) | Kasasa Cash |
| Axos Bank | 1.25% (up to $50k), 0.00% ($50k+) | Rewards Checking |
| BankFirst | 1.25% (up to $15k), 0.15% ($15k+) | Interest Checking |
| Quontic Bank | 1.10% (all balances) | High Interest Checking - Account review |
| FitnessBank | 1.00% (up to $25k), 0.25% ($25k+) (requires using step tracker app and averaging 10k steps/daily) | Fitness Checking Account - Account review |
| Northwest Federal Credit Union | 1.00% (up to $15k), 0.25% ($25k+) | Kasasa Cash - Account review |
| Blue Federal Credit Union | 1.00% (up to $15k), 0.10% ($15k+) | Extreme Checking (up to 3.00% w/account relationships) - Account review |
| Hanscom Federal Credit Union | 1.00% (up to $15k), 0.10% ($15k+) | Kasasa Cash Checking - Account review |
| First Security Bank & Trust | 0.80% (up to $15k), 0.10% ($15k+) | Kasasa Cash - Account review |
| Bay State Savings Bank | 0.50% (up to $20k), 0.05% ($20k+) | Kasasa Cash - Account review |
Certificates of Deposit:
- Best CD Rates (Nationwide and by State)
- Best IRA CD Rates (Nationwide and by State)
- Survey of the Best CD Rates (Nationwide and Local)
Bank Account Alternatives - May Not Be FDIC Insured
| Institution | APYs | Notes |
|---|---|---|
| Aspiration | 5.00% (up to $10k), 0.10% ($10k+) Plus Save Account | Aspiration Plus Save when $1k+/mo debit card purchases in Spend Account |
| Ford Interest Advantage | 3.80% (all balances) | Ford Interest Advantage review |
| GM Financial Right Notes | 3.75% ($500+) | |
| Duke Energy PremierNotes | 3.75% ($50k+), 3.60% ($10k+), 3.55% (less than $10k) | Duke Energy PremierNotes review |
| Fidelity Money Market Fund | 3.69% 7-day yield | |
| Vanguard Federal Money Market Fund | 3.68% 7-day yield | |
| Wealthfront | 3.30% Cash Account | Cash Management Account |
| Aspiration | 3.00% (up to $10k), 0.00% ($10k+) Save Account | Aspiration Save when $1k+/mo debit card purchases in Spend Account |
| Vanguard Municipal Money Market Fund | 1.73% 7-day yield | |
| Fidelity Municipal Money Market Fund | 1.63% 7-day yield |
Accounts No Longer Available
| Monifi | 0.70% | Monifi Save - Internet bank, deposits held by MidFirst Bank (currently not accepting new applications) |
| WauBank | 0.40% ($5k min) | High-Yield Savings (only available in AZ, CT, FL, MA, RI, TN, VA) - Account review |
| Envision Bank | 1.01% (up to $25k), 0.05% ($25k+) | Envision Max Checking - Account review |
Accounts Removed, Rate Too Low
| The Federal Savings Bank | 0.60% ($100k), 0.40% ($50k), 0.30% ($25k), 0.20% ($10k), 0.15% ($1k) | Money Market - Account review | |
| FACILE | 0.50% | Savings Account - Internet bank, deposits held by Pacific National Bank | |
| National Cooperative Bank | 0.50% ($100 min deposit) | Impact Money Market | |
| Kinecta Federal Credit Union | 0.50% ($100k), 0.40% ($50k), 0.25% ($10k), 0.20% ($2.5k), 0.15% (up to $2.5k | High-Yield Money Market - Account review | |
| MutualOne Bank | 0.40% ($1m max) | Online Statement Savings - Account review |
Post Publication Edits
12/1/2022: CFG Bank High Yield Money Market Account rate has been increased.
12/1/2022: UFB Direct High Rate Money Market rate has been increased.
12/1/2022: UFB Direct High Rate Savings rate has been increased.
I thought Powell's speech and Q&A was pretty good today except for one glaring omission. I think he correctly attributed much of the inflation to a shortage of workers in the labor market, and explicitly detailed accurately some of the reasons why that is so. But I think his glaring omission was that the current people in charge of the federal government have been consistently paying people not to work since they took office and therefore forcing the private sector to have to compete with its own government on an unequal playing field in which the government has the monetery printing press. If Powell's excuse for obviously leaving that extremely critical explanation off of the list is that it is about fiscal policy and not monetary policy, I beg to differ. The two are inextricably intertwined and the fact that he did not even mention it calls his veracity into question in my mind.
I particularly enjoyed Ken's comparison to 2006. How I would love to have access to the DA database to perform some additional analyses.
In addition to the one or two financial institutions mentioned that had the highest savings account rates during that similar TFFR print, I would really like to know what say the top 1% of rates was for the various terms from savings accounts to CDs by term. I think it might give a more indicative picture of the comparison between TFFR then and now helping to eliminate the possibility that those two are just freak outliers.
It's no wonder that fewer people are working now than were working before the pandemic hit. And it's no wonder that employers can't fill millions of open positions at a price that consumers are willing to pay for.
After his speech today I would be shocked if the increase at the December meeting is more than 50 bps. But I think there's expectation inflation going on in the markets. 50 bps used to be considered a pretty big increase. Now 75 bps seems to be the new norm below which is bullish. Have to wonder about that.
This was when the FFR was 5.25%. The general consensus is we' will get there sometime in early 2023. If that happens, savings account rates are going to be well over 4%. How can CD rates be below savings account rates??
"Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level. It is likely that restoring price stability will require holding policy at a restrictive level for some time. History cautions strongly against prematurely loosening policy. We will stay the course until the job is done."
This doesn't sound like we are seeing peak rates anytime soon.
Inflate away the debt, spend taxpayers' money like there's no tomorrow, and eventually there won't be. That's what's been going on for the last 2 years.
https://www.brookings.edu/blog/up-front/2022/07/27/projecting-the-structure-of-us-treasury-debt/
In my state, public employees are gifted a pension based on the last three years' of compensation. So, the higher the compensation, the higher the future pension cost. Our police chief got a nice (estimated) million dollar retirement bonus this way. The public neither understands, or cares.
My point is, a home mortgage borrower, does benefit from inflation, at least as it relates to the mortgage compared to the value of the house. But, the cost of many liabilities will also rise. Inflation is not a clear solution.
Both the Treasury and the Federal Reserve, failed, and will continue to fail. It is hard to comprehend why longer-term Treasurys were not sold in higher volume.
PCE is reported tomorrow. CPI next week, I think.
The labor market is way too tight, causing too much wage inflation which permeates much of the economy. The services component of inflation is by far the most important component and also the stickiest because of wage price inflation which is the biggest cost most companies have. What is not being discussed is that there was a release of labor data today and it was showing the labor market has far to go before the Fed can stop increasing rates.
Will see in the next few months if inflation data is coming down across the board, but it is clear the Fed thinks there is still quite a bit work left to do.
The two Obama economists who were right in 2021 when everyone else was wrong (Summers and Furman) still think the Fed has to keep increasing rates until there is much greater slack in the labor market. Furman put it very well today when he said the following:
"Based on my macro outlook, I expect that process to take the Fed Funds rate to something more like the 5-5.25 range but we'll see. And the odds of a FFR peak less than 4.75% or greater than 6% are reasonably high too.
If Furman is right, it seems to me the most sensible thing to do based on the probabilities is too wait until next year before pulling the trigger on CDs. Of course, inflation data in the interim may change this scenario, but from what I know today this seem to be the best course of action.
I thought the 10 year would go higher also but not looking that good right now, tomorrow and Friday will give me a better idea .......hindsight is always 20/20
Btw, just because a couple credit unions offered 4% rates back then that was the top, the rates stopped closer to 3.5% because the other ones were pretty much outliers and might not have been around long enough for people to get them.
We got one better-than-expected CPI number and, as Powell stressed in his speech, two of the three major components of inflation remain problematic. Why not wait to see the data before giving the markets even a hint that they are going to slow down the increases?
If either of those sets of number come in much above expectations, today's message ends up unnecessarily adding to market uncertainty.
Good luck to all
donnie d
Neat, right!?!?
If Joe's Annuities goes bankrupt, "non-profit" Nationwide, is there to cover the loss.
Unlike state governments, even non-profit insurance companies, have to make a profit.
Of course none of this is entirely accurate, because each state operates their guaranty, independently.
And Lou if Nationwide folds everything else is probably going with it. I refuse to ride this thing back to zero. A man with the edge knows that being comfortable is the enemy of greatness.
Donnie D
Nationwide (at least the one sold through brokers) at 5.35% for 7 years, allows for withdrawal of 10% per year, with no penalty.
And apparently, buying direct pays an extra 0.10%.
Donnie d
Donnie D
There are different ways you can interpret this: either as proof that the markets are indeed free and it's a random walk so therefore no one can predict it and picking any random person on the street to get their prediction will result in as accurate a prediction as listening to the experts.
But why then are expert predictions so prolific?
Well first of all they make money making predictions. So that's understandable. There's a big demand for it and lots of buyers.
But you can't rule out that the whole thing is just a charade designed to make you think that the markets are in fact free when they are actually manipulated by the little man behind the curtain.
If that's not the case, then why do so many people hang on the experts' every word? It's either random or it's manipulated. If it's random expert advice with respect to the direction of the market would be meaningless. So if you care about expert advice on that you are implicitly believing that the market is manipulated and that some people have a better insight into the scam than others.
Just because you're paranoid doesn't mean they're not out to get you.
So the little guy thinks, hey, what a deal - got this genius pundit on CNBC who's well-paid by all these big guys, and I can listen to him for the price of a cable subscription! But, give that another thought - if the pundit's paid by the big guys, do you really think he hasn't already given his best advice to his clients, and given them ample opportunity to act on it? Before saying anything to the millions of little guys watching CNBC, who don't pay him? Yes, that's right - the purpose of the CNBC appearance is to get that price pumped up by thousands of little guys who buy in after the clients are already invested.
Donnie D
Guaranty is not rated as high as Nationwide and is a smaller company, so the lack of insurance coverage could be an issue for them. Is the interest on these annuities compounded and reinvested every month?
2 observations
1. Major online savings accounts (Barclays in my example) rate hikes timing has fallen a full hike cycle behind the Fed moves (approx 6 weeks). Their next rate move up from 3.0% will likely be around when Fed next moves up. Not sure if /when they will ever catch up as Ken has noted.
2. Vanguard and Fidelity Money market rates (now 3.7%) lag the 30 day T-bill by a lot less and will jump up to follow the Fed hikes almost immediately. As long as Fed overnight Repo market keep paying MMkt funds the current funds Fed rate, MMKt funds still look like a low risk way for individuals to track rising rates.
I just spent an hour with a fine tooth comb scrutinizing the Oct PCE report. I can honestly say this is not a good report, in fact it is quite alarming.
The headline number for PCE and Core PCE did moderate some because non-durable consumer goods prices are falling. However, the all-important services component which makes up half of the index is still very troublesome. It rose .4% month to month and 7.2% over the preceding 12 months. This is a very bad number. After increasing the Fed Fund Rate by 400 basis points, the Fed has made no progress at all in taming inflation in this category. The reason is because the labor market is still very tight with job vacancies at an all-time high. Wages are going up at an unsustainable clip putting great deal of upward pressure on services inflation. I have no idea why the market thinks this is a good report. What it shows is that inflation has become imbedded in our economy and it is going to be very difficult to root it out.
For all intents and purposes, the Fed should do 75 basis points in Dec and continue with similar size increases until this number comes down. I will be amazed if the Fed decides we are close to peak rates with the numbers that were released today. It should be interesting to see what they do.
https://www.youtube.com/watch?v=fv_Zy9qz4j8
https://finance.yahoo.com/news/november-jobs-report-labor-department-december-2-225203710.html
Non-farm payrolls: +263,000 vs. +200,000 expected
Unemployment rate: 3.7% vs. 3.7% expected
Average hourly earnings, month-over-month: +0.6% vs. +0.3% expected
Average hourly earnings, year-over-year: +5.1% vs. +4.6% expected
The REAL unemployment rate is much higher then the fake unemployment number that is plastered all over the news shows. That number only includes people who are looking for work. It's dumb on its face.
Millions of people aren't working anymore, even though there is a record number of job openings, hence it is driving up competition for employees, wages and therefore inflation.
The story is pretty simple.
Again I refer to what really matters to people here, which is their real return after inflation. When inflation is rising faster than rate increases in deposit rates you are losing money all the way to the bank. And real returns have been falling precipitously since 2021 when the engines of inflation were lit and it took off like a rocket.
Wage inflation came in much hotter than expected. Treasury yields have given up about half their gains since the speech and Dow futures are down ~ 350 at the moment.
While goods inflation appears to be less of a problem, services inflation and wage inflation remain persistently well above the Fed's target.
We get CPI data Dec 13, the day the Fed's next two day meeting starts.
IMO, it is too soon to take a hike of 75bp off the table.