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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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Bank Deals Blog: Fed / Banking News

Federal Reserve, the Economy and CD Rate Forecast - June 8, 2021
Federal Reserve, the Economy and CD Rate Forecast - June 8, 2021

Another Fed meeting is scheduled for next week (June 15-16). No policy changes are expected. For the rest of the Fed meetings this year, there will be a search for signs about when the Fed will begin to taper its asset purchases.

The latest speculation about the taper timing was discussed in this CNBC article. The article includes a possible taper timeline in which the Fed discusses tapering at its June or July meeting, announces tapering at its September or November meeting, and begins tapering in December or January.

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Federal Reserve, the Economy and CD Rate Forecast - June 1, 2021
Federal Reserve, the Economy and CD Rate Forecast - June 1, 2021

Note regarding the liquid account summary: Since today is the first day of the month, the liquid account summary will be delayed until Wednesday. This will give me time to include new-month rate changes into the summary.

Last week, the April Personal Income and Outlays report was released. This report included the personal consumption expenditures (PCE) price index. The core PCE (which excludes food and energy) is the Fed’s preferred inflation gauge. In April, core PCE increased 0.7%, and on a year-over-year basis, the core PCE increased 3.1%. According to Reuters,...

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Federal Reserve, the Economy and CD Rate Forecast - May 25, 2021
Federal Reserve, the Economy and CD Rate Forecast - May 25, 2021

For the rest of this year, we’ll be watching how high inflation rises and how long it takes for the Fed to start shifting to a tightening policy. April CPI numbers that were released on May 12th showed higher inflation than economists had predicted.

More inflation news will come on Thursday when the April Personal Income and Outlays report is released. This report includes the PCE price index. The core PCE (which excludes food and energy) is the Fed’s preferred inflation measure. According to the Calculated Risk blog, the consensus is...

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Federal Reserve, the Economy and CD Rate Forecast - May 18, 2021
Federal Reserve, the Economy and CD Rate Forecast - May 18, 2021

The big news in the last week was the inflation numbers for April. The Consumer Price Index (CPI) for April far exceeded economists’ expectations. The year-over-year gain in the CPI was 4.2% and the month-to-month gain was 0.8%. Even core CPI (which excludes food and energy) far exceeded expectations. Core CPI increased 3% on a year-over-year basis and 0.9% on a monthly basis. According to this CNBC article, “the monthly gain in core inflation was the largest since 1981.”

As expected, Fed officials are insisting that this inflation is just temporary....

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Federal Reserve, the Economy and CD Rate Forecast - May 11, 2021
Federal Reserve, the Economy and CD Rate Forecast - May 11, 2021

The surprisingly weak April jobs report that came out on Friday will make it easier for the Fed to delay rolling back accommodations. The first step in the rollback will likely be tapering of the asset purchases. Fed Chair Powell has said that the Fed is looking for “substantial further progress” toward their goals before they start tapering. We’ll probably need several months of strong job reports before the Fed will start thinking about tapering.

Tapering of asset purchases will likely start the process of pulling back accommodation. Tapering involves the...

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Federal Reserve, the Economy and CD Rate Forecast - May 4, 2021
Federal Reserve, the Economy and CD Rate Forecast - May 4, 2021

As expected, there were no policy changes announced at last week’s Fed meeting. In the post meeting press conference, Fed Chair Jerome Powell refused to give any clear timetable about when the Fed would start pulling back policy accommodations, which would include reducing its asset purchases and hiking rates. The Fed Chair would only say that they are looking for “substantial further progress” toward their goals. In the Fed Chair’s opening statements, the latest employment data was described which showed the long road ahead before the economy recovers to pre-pandemic...

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Federal Reserve, the Economy and CD Rate Forecast - April 27, 2021
Federal Reserve, the Economy and CD Rate Forecast - April 27, 2021

The Fed meeting began today. The FOMC statement is scheduled to be released at 2:00pm on Wednesday, followed by Fed Chair Powell’s press conference at 2:30pm. It should be an uneventful meeting. No policy changes are expected, and no new economic projections will be released. The meeting statement along with the Fed Chair’s press conference may provide some clues about when the Fed will start thinking about exiting from its current accommodative policy. Goldman Sachs economists (via CalculatedRisk) think there will soon be tapering signs from the Fed:

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One-Year Anniversary of Reg D Change - Impact to Savings Accounts
One-Year Anniversary of Reg D Change - Impact to Savings Accounts

Last Saturday was the one-year anniversary of a little-known change in a Federal Reserve regulation that impacts savers. On April 24, 2020, the Fed announced a change to Regulation D that permits banks and credit unions to allow their customers to make more than six payments or withdrawals per month from their savings and money market accounts.

One thing that wasn’t apparent when the Fed first announced this change was if this change would be permanent or just temporary. A couple months after the announcement, the Fed updated its FAQs by...

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Federal Reserve, the Economy and CD Rate Forecast - April 20, 2021
Federal Reserve, the Economy and CD Rate Forecast - April 20, 2021

Next week on April 27 and 28, the third FOMC meeting of 2021 is scheduled. No policy changes are expected and no new economic projections will be released. The meeting statement along with the Fed Chair’s press conference may provide some clues about when the Fed will start thinking about exiting from its zero interest rate policy.

The first exit step for the Fed will be signaling that it intends to taper its asset purchases (buying $80 billion in Treasury securities and $40 billion of agency mortgage-backed securities each month). In...

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Federal Reserve, the Economy and CD Rate Forecast - April 13, 2021
Federal Reserve, the Economy and CD Rate Forecast - April 13, 2021

With the Fed’s zero rate policy in a holding pattern for the foreseeable future, two other factors will influence deposit rate changes this year.

First, the deposit and loan levels at the banks will likely put downward pressure on deposit rates. The latest stimulus checks from the government will only add to the record level of deposits at banks and credit unions. When banks are flush with deposits, they will more likely drop their deposit rates.

If loan balances increase more than deposit levels, that can increase the demand for deposits at...

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