Bank Deals Blog: Deposits Education and Strategies

At the conclusion of the FOMC meeting, the Fed announced its third straight 75-bp rate hike. The target federal funds rate is now 3.00%-3.25%. This is now far above the peak of the last rate hiking cycle (2015-2018). We haven’t seen federal funds rates this high since early 2008.

Today’s FOMC Statement is actually very close to the July Statement. Below are excerpts from today’s FOMC policy statement that covers the rate decision:

All voting members voted in favor of today’s policy action.

In addition to the statement, the Fed released its quarterly...

At the conclusion of the FOMC meeting, the Fed announced its second straight 75-bp rate hike. The target federal funds rate is now 2.25%-2.50%, which is the target range that had existed at the peak of the last rate hiking cycle in December 2018. It took three years of rate hikes from 2015 to 2018 to equal the rate hikes from the last four and a half months. Below are excerpts from today’s FOMC policy statement that covers the rate decision:

For the full details, please refer to today’s FOMC Statement.

Update 10:30pm, 6/15/22: Reviews of the Fed Chair press conference and the Summary of Economic Projections (SEP) were added. Also, sections on Treasury yields, deposit rates and strategies for savers were added.

The Fed announced its first 75-bp rate hike since November 1994 at the conclusion of its meeting today. The target federal funds rate is now 1.50%-1.75%, which is the target range that had existed before the start of the pandemic. If the Fed hikes 75 bps again at its July 26-27 meeting, we’ll be back at the peak...

The Fed announced its first 50-bp rate hike since 2000 at the conclusion of its meeting today. In addition, the FOMC statement suggested that additional 50-bp rate hikes will be likely. The big news came from the post-meeting press conference when Fed Chair Powell downplayed the possibility of a 75-bp rate hike. That was interpreted by the markets as a dovish move resulting in a rally in the stock market. This didn’t help ease concerns that the Fed isn’t up to the job of controlling inflation.

Before reviewing the Fed Chair’s...

After two years of near zero rates, the Fed has announced liftoff with a 25-bp rate hike. In addition, the FOMC statement suggested that rate hikes are likely at each of the remaining six meetings this year. In addition to rate hikes, the Fed addressed its balance sheet. It didn’t announce a reduction of its balance sheet at this meeting, but it did state that the reduction would begin “at a coming meeting.” The following is an excerpt from today’s FOMC statement that describes these policy actions:

The Fed delivered today what was widely expected in paving the way for rate liftoff at its March 15-16 meeting. The language from the FOMC statement and from Fed Chair Powell’s press conference made it pretty clear that, barring any surprises, a rate hike in March should be expected. The Fed also met expectations on tapering by announcing one final round of asset purchases in February which will result in taper completion by March. The following excerpt from today’s FOMC statement is the formal announcement of these plans:

Unlike banks, credit unions have fields of membership (FOMs). You must be in the FOM to be eligible to join the credit union. Many FOMs include a geographic area. If you live or work in that area, you are part of the FOM and eligible to join the credit union. Also, many credit union FOMs include Select Employee Groups (SEGs). If you work for one of these employers, you are part of the FOM and eligible to join. It’s also very common for credit union FOMs to include family members.

Family...

The speed-up of tapering was formally announced in today’s Fed statement. This speed-up will result in tapering ending in March 2022. During the press conference, Fed Chair Powell confirmed that the Fed does not want to start hiking rates before tapering has been completed. Thus, the tapering speed-up should be considered a speed-up of future rate hikes. Also, the speed-up of future rate hikes can be seen in the new dot plot from today’s Summary of Economic Projections (SEP). The dot plot shows that 12 out of 18 of...

High-yield reward checking accounts can be an alternative to online savings accounts for money that you want to keep safe. Like online savings accounts, reward checking accounts are liquid and safe. Many reward checking accounts offer higher yields than online savings accounts. The two main issues with reward checking are the monthly activity requirements to qualify for the high rate (debit card usage being the primary requirement) and the balance cap that limits how much of your money can earn the high rate.

You can use our reward checking table to...

At the completion of its two-day FOMC meeting, the Fed announced the start of tapering in its FOMC statement. As expected, the pace of tapering will be $15 billion reduction per month, which should end asset purchases by June of next year. The Fed left open the possibility that it might adjust the pace of tapering:

The only other important change is related to the Fed’s “transitory” inflation language. The Fed is still sticking with transitory, but it added some acknowledgement of uncertainties. It also tried to provide an explanation about...