Fed Meeting: Fourth Straight 75-bp Rate Hike - Strategies for Savers

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At the conclusion of the FOMC meeting, the Fed announced its fourth straight 75-bp rate hike. The target federal funds rate is now 3.75%-4.00%. 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.

Below are excerpts from today’s FOMC Statement that covers the rate decision:

the Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent

In the rate decision paragraph, there are hints that the Fed is preparing to slow the pace of the rate hikes. The excerpt below is what was added from the previous meeting statement:

The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.

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

There is no update to the Fed’s Summary of Economic Projections (SEP) at this meeting. The next Fed meeting on December 13-14 will provide SEP updates, including the federal funds rate dot plot.

More To Come

I plan to update this post later today with additional commentary on the Fed meeting and the Fed Chair press conference. In addition, I’ll discuss my take on deposit account strategy in this rising rate environment. I just wanted to publish this initial post so that comments can begin.

Update: The following content was added at 9:34pm EDT on Wednesday, November 2, 2022.

Post-Meeting Press Conference

That new addition to the FOMC statement opened the door to a smaller 50-bp rate hike in December. At the press conference, Fed Chair Powell opened the door to a higher terminal policy rate than what the Fed had suggested in September via the SEP. The dot plot of that SEP pointed to a peak rate of 4.50%-4.75% by the end of 2023. In Fed Chair Powell’s opening remarks, he warned that rates may have to go higher:

There is significant uncertainty around that level of interest rates. Even so, we still have some ways to go, and incoming data since our last meeting suggest that the ultimate level of interest rates will be higher than previously expected.

So even if the Fed transitions to a 50-bp rate hike in December, it may not mean that a rate pause is near. In the Q&A session, Fed Chair Powell tried to downplay any near-term transition to a pause in rate hikes:

So I would also say it's premature to discuss pausing. It's not something that we're thinking about. That's really not a conversation to be had now. We have a ways to go.

It’s not quite the “we’re not even thinking about thinking about” language that Fed Chair Powell used in 2020 when asked about rate hikes, but it’s similar, and it suggests that we have at least several more months of rate hikes of at least 50 or 25 basis points in size. Another 125 bps of rate hikes would increase the target federal funds rate to 5.00%-5.25%, which is close to the peak rate (5.25%) seen in 2006 and 2007 when online savings account rates peaked in the 5% to 5.50% range.

Once the Fed pauses on rate hikes, the next question is how long will the pause last. In 2019, the pause lasted just over seven months. Fed Chair Powell ended his opening remarks suggesting that we shouldn’t expect a quick pivot to rate cuts:

Restoring price stability is essential to set the stage for achieving maximum employment and stable prices in the longer run. The historical record cautions strongly against prematurely loosening policy. We will stay the course, until the job is done.

The Fed doesn’t want to repeat the 1970s when they didn’t stick with tight monetary policy to end high inflation, and that eventually forced the Fed, led by Paul Volcker, to hike rates to very high levels in the early 1980s.

Future FOMC Meetings

The next three FOMC meetings are scheduled for December 13-14, January 31-February 1, and March 21-22. The December and March meetings will include the Summary of Economic Projections (SEP).

Treasury Yield Changes

The Fed meeting didn’t have much impact on Treasury yields. Short-dated Treasury yields were down slightly today while long-dated yields were up slightly. The 2-year Treasury yield had the largest change, rising 7 bps to 4.61%.

The yield changes since the last Fed meeting are significant. Yields of all durations had sizable increases. The short-duration yields had the largest gains with the 1-month yield rising 111 bps, the 3-month rising 91 bps, and the 6-month rising 71 bps. The long-duration yields had smaller gains, but they were still sizable with the 30-year yield rising 75 bps, the 10-year yield rising 59 bps, and the 5-year yield rising 56 bps.

All Treasury durations except the 1-month now have yields above 4%. The 1-year yield is 4.76%, which is the highest yield of all durations. It might not be long before we see 5%.

In general, the Fed’s rate hikes are putting more upward pressure on short-dated Treasury yields than the long-dated yields. The result is a yield curve that is becoming more inverted. The spread between the 10-year yield and the 3-month yield (10y-3m spread) was positive after the last meeting (+20 bps). Now it’s negative (-12 bps). The spread between the 10-year yield and the 2-year yield (10y-2y spread) remains negative. Oddly, today’s 10y-2y spread equals the 10y-2y spread after the last Fed meeting (-51 bps). Historically, the more inverted the yield curve, the more likely that a recession follows within the next year.

The following yields are from the Daily Treasury Par Yield Curve Rates from the Treasury website.

  • Sep 21 (last mtg) → Nov 1 → Nov 2
  • 1-mo: 2.59% → 3.72% → 3.70%
  • 3-mo: 3.31% → 4.23% → 4.22%
  • 6-mo: 3.86% → 4.58% → 4.57%
  • 1-yr: 4.08% → 4.75% → 4.76%
  • 2-yr: 4.02% → 4.54% → 4.61%
  • 5-yr: 3.74% → 4.27% → 4.30%
  • 10y: 3.51% → 4.07% → 4.10%
  • 30y: 3.50% → 4.14% → 4.15%

Future Deposit Rates

Online savings account rates have generally lagged the Fed rate hikes, and the lag has been greater than what we saw in 2018. The speed of this year’s Fed rate hikes may have contributed to this lag. If that is the case, we will likely see online savings account rates rise for some time after the last Fed rate hike until the top online savings account rates are close to the upper limit of the target federal funds rate. Both in 2006/2007 and in 2018/2019, top online savings account rates were close to the upper limit. If that does occur in 2023 and the target federal funds rate reaches around 5%, we should see top online savings account rates increase to near 5% in the first half of 2023.

The path of CD rates is more uncertain. Treasury note yields have often been early indicators of where CD rates are headed. Brokered CD rates are first to follow Treasury yields, and direct CDs from online banks and credit unions follow with some more lag.

Inflation and recession expectations drive long-dated Treasury yields more than Fed rate changes. As can be seen in the Treasury yield changes above, long-dated Treasury yields have risen since September even though they haven’t risen as much as the short-dated yields. You can see the bumpy path of 5-year Treasury yields this year in this chart that compares the yields of the average 5-year online CD to the 5-year Treasury note. If recession worries grow, these long-dated Treasury yields may fall back below 4%. If that happens, banks and credit unions may not be in a rush to offer new high rates on their CDs.

As I mentioned after the last Fed meeting, we may get to the point in which top online savings account rates are near or above the top CD rates. It’s going to be hard to justify locking into a long-term CD in this case. However, those who realize how fast savings account rates can fall, won’t dismiss CDs.

The 2022 rise of rates can be seen in the charts of the average online savings account rates and the average online 1-year and 5-year CD rates.

Strategies for Savers to Maximize Cash Yield

It’s hard to find CDs appealing when rates are rising fast. As I mentioned above, rates will eventually peak and then start falling. We should first see this decline in Treasury yields. That can give savvy savers time to lock into long-term CDs at relatively high rates. This condition occurred in 2019 before the first Fed rate cut and in 2020 before the emergency Fed rate cuts in March 2020.

CDs with Mild Early Withdrawal Penalties

Of course, you never can be sure if rates have peaked. To ease concerns, look for CDs with mild early withdrawal penalties (EWP). For long-term CDs, a mild EWP would be six months or less of interest. If rates do go higher, a mild EWP will make it less costly to close the CD and move the funds into an account with a higher rate.

No Penalty CDs to Boost Savings Account Yields

If you’re going to wait for rates to peak, liquidity will be important so that you can quickly fund a CD before rates fall. Online savings accounts, money market accounts and checking accounts with the highest rates would be best. You can sometimes get an additional boost in yields with little loss of liquidity by using no-penalty CDs. Today’s rate hike of Ally’s No Penalty CD is a good example. Ally customers can use the 11-month No Penalty CD to get an extra 60 bps of yield with very little loss of liquidity.

If you do use no-penalty CDs, just be sure to monitor the rates. If savings account rates rise above the no-penalty CD rate or if higher no-penalty CD rates become available, you should close the no-penalty CD and move that money.

Add-On CDs for Low-Rate Insurance

Another useful strategy is to acquire as many long-term add-on CDs as you can. Open these with just the minimum deposit. If rates rise well above your add-on CD rate, you can just let the add-on CD continue without additional deposits. With a small minimum deposit, this won’t cost you much. On the other hand, if rates do fall before the add-on CD matures, the value of the add-on CD grows as rates fall. In this case, the additional deposits into the add-on CD could earn you a lot more than opening a new CD. Long-term add-on CDs can be a great low-rate insurance policy, offering some protection against falling rates. Mountain America Credit Union just came out with higher rates on its CDs, including its add-on CDs (called Growth Certificates). The two best deals are its 24-month CD (4.50% APY) and its 60-month CD (4.00% APY).

Treasury Bills/Notes and Brokered CDs

Currently, Treasury bills/notes and brokered CDs have rate advantages over the vast majority of direct CDs. There are a few CD Specials which may have higher rates for a specific maturity. Treasury bills and notes also have some tax advantages and they can be easier to manage, especially in IRAs. The downside is an uncertain cost if you want to access the funds before maturity. Unlike direct CDs, there’s no fixed early withdrawal penalty.

Series I Savings Bonds

As I described in my Tuesday post on the new I Bond rates, new I Bonds will have a composite rate of 6.89%. This combines an inflation rate of 6.48% and a fixed rate of 0.40%. This I Bond fixed rate is a significant improvement over the 0% fixed rate that has been in effect since 2019. I Bonds that are purchased through April 2023 will earn an annualized yield of 6.89% for six months. The rate for the next six months will depend on inflation from September 2022 through March 2023. In mid-April 2023, we’ll be able to calculate the next I Bond inflation rate.

The main issue with I Bonds is that you’re limited to just $10k per year per SSN (plus $5k with your federal tax refund). I have more details on I Bonds in this post. There are ways to buy more I Bonds. This article at The Finance Buff describes how a married couple can buy up to $65k in I Bonds each calendar year via trust and business accounts.

Treasury Inflation-Protected Securities (TIPS)

TIPS bonds are an alternative to the I Bond. Like they I Bond, they provide inflation protection. Unlike I Bonds, there are no purchase limitations. The appeal of TIPS has gone up this year as their real yields have risen above 0%. Currently, the real yields are around 1.60% (see Daily Treasury Par Real Yield Curve Rates). Two useful resources on TIPS are this post by Harry Sit of The Finance Buff, and this Q&A on TIPS by David Enna of TIPSWatch.

Combination of All of the Above

It’s wise to remember that no one can accurately predict future interest rates. So if you want to keep things simple, a CD ladder of long-term CDs is always a useful strategy for your safe money. If you’re worried about being locked into a low-rate CD if rates should happen to rise, choose long-term CDs with early withdrawal penalties of no more than six months of interest. If you are concerned with rates rising very fast in the next year, keep more in online savings accounts and no-penalty CDs after you have maxed out what you can contribute to I Bonds.

For your safe money (with no risk to principal), a combination of I Bonds, TIPS, T-bills/notes, online savings accounts and CDs can still make sense.


Comments
Mak
  |     |   Comment #1
All the 4 year and 5 year CDs vanished on the Vanguard site and Fidelity only has callable 5 year CDs...lol
sams1985
  |     |   Comment #17
Celtic bank 4 year non callable @ 4.8% still available on Fidelity at the moment. They were all probably just bought up by nervous nellies. We'll see new issue non callable 5% next week.
Mak
  |     |   Comment #35
I'm ready, have a couple big CDs maturing 11/4 and 11/16 another biggie 12/03
lostsoul
  |     |   Comment #140
Im greedy.. I want 6% now.. By December.. Feds already said not to expect rates not to increase. Let it roll!!!!
Kerry2
  |     |   Comment #2
The FED is bluffing, there is no way they will stop the rates now, they are in no man's land, the rates are not high enough to fight inflation nor low enough to accommodate the pundits. Furthermore, the FED can no longer print money out of a whim, it must be covered with assets, bonds, notes or other instruments that will be paid back later. Trump single handedly destroyed the FED by integrating them with the treasury department. No more free money for the wall street, means victory for the main street. It is one way forward from now on, the FED power is diminished and controlled by the anti globalists.
lou
  |     |   Comment #62
Trump didn't integrate the Fed with the Treasury Dept. Incredible this post got 15 likes. People on this site will believe anything.
Kerry2
  |     |   Comment #152
lou #62, it would be beneficial if you do your own research, instead of listening to globalist propaganda "MSM".
hampshire
  |     |   Comment #72
Go away with your political garbage
Kerry2
  |     |   Comment #153
hampshire #72, it would be nice not to deny the truth, but it is your decision not to learn the truth..
Mak
  |     |   Comment #3
I kept records of all my CDs thru the years, in my records for 1999 I was getting no lower than 6% 5 year CDs and I had 7.5% treasury.... what was inflation in 1999...;)

1st level of support that I see for the SPX is at 3750ish.
Robb
  |     |   Comment #7
Hi Mak the SPY broke down out of yet another rising wedge pattern during Powell’s hawkish tilt during the conference call. The 10 Year back north of 4.05%.  The Dow also stalled out right at our downtrend line off the early 2022 high.
Mak
  |     |   Comment #10
I made a mistake, the first support I see is 3750ish, next is 3720ish and then back to retest the trend line from where it broke out and that is 3690ish.
Mak
  |     |   Comment #11
Hey Robb, I see what you are looking at, I missed that one.... I'm looking at a little longer view, wish I could post my chart here.No panic, still in greed mode.



Robb, draw a line from the top at 4818, connect it at the high on 3/29 and the high on 8/16 and extend it all the way..... then a line from the low on 1/24 connect it at the low on 2/24and again at 5/12 and extend it all the way.... next a line at the top 8/16 connect it at the high on 9/12 and extend and again at the high on 10/24 and extend it down... you'll see what my chart looks like.
Robb
  |     |   Comment #76
Mak I see the down channel that you are describing. Have been tracking that channel as well. Interesting times to say the,least!
Mak
  |     |   Comment #91
Sure is,,,,..so far retested the top of the triangle inside the long term channel at 3690ish....
milty
  |     |   Comment #14
The average inflation rate for 1999 was 2.20%.
Mak
  |     |   Comment #48
milty... exactly my point
milty
  |     |   Comment #82
I know. Historically, the average Fed funding rate for the year has been higher than the average inflation rate . . . well, until 2008. Hopefully, the Fed will resist going full ZIRP once this inflation has been reduced in order to avoid another asset bubble boom.
mix
  |     |   Comment #4
I watched the Fed Chair's press conference. He sure put out a vibe that inflation wasn't turning a corner and there was a lot more work to do. He seemed surprised and disappointed that what the Fed had done so far wasn't making a noticeable difference. He also indicated that the possibility for a soft landing is now significantly diminished.
Mak
  |     |   Comment #5
The fed has to prove they are serious about inflation to turn it, so far just by the way the market keeps expecting a pivot means they haven't proven it yet... imo.
The new statement hinted at that policy change, saying when determining future hikes, the Fed “will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
P_D
  |     |   Comment #6
The real annual inflation number is about 16%. So even at 4% you are losing your savings at an annual rate of 12% or more.

You can't fight 16% inflation with a 4% federal funds rate. It's a farce.

The answer is to cut federal spending and take the federal jackboot off the neck of the private sector so it can start producing again, not to force the economy into depression.
mix
  |     |   Comment #8
Do you have a source for that 16% number or is it just a gut feeling?
P_D
  |     |   Comment #9
Yes, I have sources. But the supermarket and the gas station are the only sources you need.
Shelby
  |     |   Comment #13
PD..why not post alternative investments for those that need to put cash to work now, rather then keep pounding the point that purchasing CD’s or treasuries @ 4/5% is a losing battle.
P_D
  |     |   Comment #18
"PD..why not post alternative investments for those that need to put cash to work now..."

You can't put "cash to work" now at 16% return. That's the point. By spending, taxing and regulating the economy into oblivion this Congress and White House are putting savers and investors in an impossible situation. Another way to put it is that they are confiscating your wealth since they leave you with no alternative but to lose. And they have some people cheering that rates are increasing while they are being robbed and don't even realize what is happening.
CDsuckers
  |     |   Comment #52
Since P_D lives in an alternate reality, Shelby just figured you'd know.
GreenDream
  |     |   Comment #78
The point is you pulled 16% from your nether regions (or from a conspiracy website, same difference). And it has no real bearing on actual inflation.
CuriousDave
  |     |   Comment #95
As Ken points out, TIPs are a helpful place for savings because they are currently paying about 1.60% on top of of the inflation index. We can quibble over whether or not that index adequately covers your personal inflation rate, and tax is payable on all the interest (which does dilute whatever protection from inflation we get) but currently TIPs offer a return that is superior to CDs.
lou
  |     |   Comment #124
Not so sure over a 5-year time span. Yes, it probably is for next year or two but no one knows after that. I would prefer having a fixed rate for those later years.
P_D
  |     |   Comment #36
"Just paid 3.12 for gas here."

Wow! Only 31% more than it cost on the day the Democrats took over Washington! Now that's an accomplishment to celebrate!

There's your 16% plus inflation per year in a nutshell. The real number.
Mak
  |     |   Comment #39
P_D... a barrel of oil dropped from $50 a barrel down to below $10 a barrel, that drop was right when covid hit and then after covid it started to rise, then the pandemic ended and a war started... I think you are leaving those facts out.
P_D
  |     |   Comment #50
And I think you're leaving out the fact that the war happened precisely because of the Democrat's policies that encourage foreign dictators to make their moves in this window of opportunity while America is weak and dependent on their oil supplies. It's no coincidence that Putin invaded Ukraine while Obama was President and then was dormant for 4 years while Trump was president and now suddenly comes back with a vengeance and invades Ukraine again. The Biden administration is projecting weakness throughout the world and our enemies have been watching carefully.


And before you say you're not crazy about Biden, I'll mention that 99%+ of the Washington Democrats supported every single one of his policies up and down the line for the last 2 years. So if you're not crazy about Biden you are also not crazy about the Democrats.
CDsuckers
  |     |   Comment #53
Not crazy about Biden or the Democrats.
But since crazy is you're specialty, I'll defer to you on this topic.
Mak
  |     |   Comment #59
P_D #50....I have voted republican and democrat in the past so I don't consider myself either. I vote depending on the politician not the party, unlike you, Trump is someone I would never vote for and after watching some of the republicans such as Marjorie Taylor Greene, Lauren Bobert, Matt Gaetz, Andy Biggs, Paul Gozar, Ted Cruz, Kelli Ward, Kari Lake and so on and so on, because of these people and the rest of the republicans that spew their nonsense and garbage daily it will probably be a very long time before I vote republican again.
lou
  |     |   Comment #63
No one wants to hear your political babbling. How about just providing us with your scintillating investment advice.
CDsuckers
  |     |   Comment #64
I voted for Nixon but that was because Humphrey considered the Vietnam War to be a Our Great Adventure!
lostsoul
  |     |   Comment #142
Thats right.. no need to support America first people that have proven themselves. We are doing great right now. Econ, Crime, Boarder, Rigged Voting, on the steps of WW3 with Russia, Sending arms all over the world. Covid coverup, Seth Rich cover up, FBI raiding journalist homes illegally for a Diary you guys cant even admit and look it. This is what hurts that so many have no idea whats going on and when someone gives them the info on a silver platter its ignored and goes back to Repub vs Dems. We have a Corrupt Uni-party. I have already said and showed many Repubs and Dems stabbing us all in the back coving up anyone trying to look at ballots or even implementing laws to fix issues. In Az the State senate is doing another audit, this time of the envelops for 2020. After 140K (5%) they are at 24% fraud ( Fake/ No sigs/ Dead). They already have much more then the difference in the election. Not a peep from the media and they made it clear they are not contesting anything and the election workers "will have to do better"... next time.. haha. They had this info for 2 years..Repubs blocked and covered. So the list of people your against are the only ones that can help save this country ... if its not too late. No one knows how Trudeau keeps winning. Brazil just had a coup (using machines too). Time to wake up kiddy's the Cover is lifted to see the truth if your willing to spend a few minutes outside your bubble.
milty
  |     |   Comment #151
#142: Hmm, sounds like Thus Spoke QAnon :-)
milty
  |     |   Comment #84
#50: I think you're leaving out a wee bit of history as well as to why Russia invaded Crimea in 2014, dating back to NATO expanding Westward. But as to why Russia and Trump got along so well, well that's all part of Russiagate now isn't it. It certainly appears that Putin favors Republicans. But in terms of policies that ended up in a 20-year historic blunder, let's go back to 2003.
GreenDream
  |     |   Comment #77
unnamed sources are no sources at all. A real measure of Inflation would encompass more components of the economy than the supermarket and the gas station. Once again P_D, I'm sad to say, you embarass yourself with your willful ignorance on the subject of inflation measurement. The CPI is not a conspiracy, it's a measurement. It's long pass time that you learn the difference.
CDsuckers
  |     |   Comment #12
Ya, he's channeling the Psychic Friends Network (or, is it Psychotic?).
Cherry pick two components of inflation instead of the BLS's 80,000 items.
The answer is to raise taxes on the freeloading corporations that pay no tax.
And, no fake offshore domiciles.
If you make your money in the US, pay some taxes in the US.
P_D
  |     |   Comment #42
"Cherry pick two components of inflation instead of the BLS's 80,000 items."

Because the price increases of chia seeds and left handed over-head framis valves is what's really meaningful to most people.
Buckeyes
  |     |   Comment #97
Inflation is different to everyone. I drive 1/4 less now since retirement. I buy store brands and love shopping around for deals They are out there. Depending on what you need yep truly you could be experiencing 16% inflation, like the idiots completely overspending for that car they love cuz they just gotta have it, or you have been suckered into a 10 grand trip to disney world cuz the kids just gotta have it. My point is inflation is not the same for everyone by a long shot, and I refuse to feel sorry for the gotta have it crowd.
GreenDream
  |     |   Comment #130
Yes and no. How burdened an individual is by inflation is different to everyone. As you say, everyone's spending habits differ, so if you aren't partaking a great deal of the things in the economy that inflation has hit the hardest, you aren't going to "feel it" as strongly as the person who is doing so. But regardless of how you "feel" inflation, every single dollar you own is now worth less than it was which means the purchasing power of your money is now less, regardless of how much you are "feeling" the effects of that decrease in purchasing power at any given moment. Inflation doesn't care about your feelings.
Buckeyes
  |     |   Comment #146
you also have the opportunity to switch green. For instance I refuse to buy a $6 bag of Doritos. Or anything General Mills after hearing about their profit. You can save a bundle with store brands. Now is your opportunity to do so or at least try. Shopping online can certainly be your friend as well. I just scratch my head at the people buying half a grand houses stupidly with an ARM and then crying about mortgage rates. If you are going to cry based on that hit, perhaps you should look at a cheaper house to begin with. Most people either won't or don't know how to save. Like the local people who are getting one tenth of one point interest savings from their local bank. A smarter crowd is here, and i learn something new every day.
GreenDream
  |     |   Comment #166
Indeed. I've long been buying store brands items (often made in the same factories as the name brand items), shop for bargains, etc. Those are all wise things to do. But even those things are getting more expensive over time thanks to inflation.
gshome
  |     |   Comment #15
The two main factors that I have are the electric and gas bills. They have gone up 20% and 30% respectively for this year and likely to go up even further in 2023. So add that to the rising food costs, gasoline, rents, insurance, etc. I'm hoping CD rates continue to go up well beyond 5% so that might help keep up with inflation if and when it starts to decrease. My goal is to get a high rate CD at it's peak for at least 3-5 years. As it looks now, March of 2023 might be the time.
lostsoul
  |     |   Comment #143
Yeah, I loved the kill gas and go to solar and electric and now both have shot up like crazy.. lol either path they have us buy the [email protected] haha PG&E now how rolling black out all the time.. fun times.
milty
  |     |   Comment #16
Walmart raised soy milk by 33%. So, bought at Aldi's instead for same old price. Net inflation: 0%

Appears oil companies are doing just fine, using their own jackboots to squeeze the consumer's wallet as much as possible. It appears for now our companies are more driven by price than production.
https://www.pbs.org/newshour/show/oil-companies-post-massive-profits-as-consumers-feel-squeeze-from-high-gas-prices 11/1/2022
CDsuckers
  |     |   Comment #20
Soymilk is so 20th Century.
Hipsters like yourself need to transition to coconut, almond, oat, rice, cashew, macadamia, quinoa and hemp milk.
Yup, pour some cannabis sativa milk into your coffee.
Happy days are here again.
111
  |     |   Comment #28
First*suckers - Sorry man, but every single item in your "woke" shipment from Whole Foods either causes cancer or is under study by the FDA for doing so! The only exception is coffee itself, which over the years has been proven to be quite healthy.
CDsuckers
  |     |   Comment #54
Actually, studies have shown just the opposite.
And, if you make you're own hemp milk with the right ingredients, you won't worry about those things much.
111
  |     |   Comment #92
That explains 98% of your posts here.
P_D
  |     |   Comment #21
"Walmart raised soy milk by 33%. So, bought at Aldi's instead for same old price. Net inflation: 0%"

milty great idea! Why not substitute a cave for your house and experience a net inflation of -50%?!

You should work for the government.  GMTA.

That's exactly how the CPI works.  Inflation number makes the government look too bad this time?  No problem, just substitute hamburger meat for steaks in the inflation formula and that means there's no inflation!  Abracadabra!
milty
  |     |   Comment #24
Good idea, and I would, except I already own my house. Anyway, let me reiterate: my costs are up a few hundred versus 2021, but my interest income is up by thousands. This is my fact, not farce.
GregoryG
  |     |   Comment #31
Same here milty. My costs are only up slightly too.
slickwilly
  |     |   Comment #119
the key to not getting hurt by inflation is to get on welfare and steal everything else,…
CDsuckers
  |     |   Comment #51
Actually factually, the CPI-U doesn't do product substitutions.
The PCE does (which lowers the inflation number, which is why the FED likes it).
So, get your terminology straight, Jack.
lou
  |     |   Comment #65
Real guys don't drink soy milk. :)
sharon907
  |     |   Comment #117
PD #21

It is disappointing, but not a surprise, that PD misstates how CPI is calculated.
That's exactly how the CPI works.  Inflation number makes the government look too bad this time?  No problem, just substitute hamburger meat for steaks in the inflation formula and that means there's no inflation!

In reality:
To begin, it must be stated unequivocally that the BLS does not assume that consumers substitute hamburger for steak. Neither the CPI-U, nor the CPI-W used for wage and benefit indexation, allows for substitution between steak and hamburger, which are in different CPI item categories.
Instead, the BLS uses a formula that implicitly assumes a degree of substitution among the close substitutes within an item-area component of the index. As an example, consumers are assumed to respond to price variations among the different items found within the category “apples in Chicago.” Other examples are “ground beef in Chicago,” “beefsteaks in Chicago,” and “eggs in Boston”….

https://econbrowser.com/archives/2008/09/shadowstats_deb
sharon907
  |     |   Comment #30
Hey Milty, does your Aldi still carry the vanilla (blue) soy milk package? Ours only has the red these days, I think it is the plain flavor.

It would apparently surprise many Americans, how food remains inexpensive in America, for people willing to learn how to feed themselves. Healthier than restaurants also.

I wish people would focus more on real life, than celebrity and wealth culture.
Mak
  |     |   Comment #40
sharon... and today was senior discount day... 10% off.
sharon907
  |     |   Comment #90
Mak #40

Does your Aldi have a senior discount day? Which day?
Mak
  |     |   Comment #167
Sharon     First Wednesday of the month but no Aldi near me, actually have never been in an Aldi but there were a bunch of them in Chicago 
milty
  |     |   Comment #49
#30: It's the red container, which seems to work out great in smoothies. We really haven't changed our grocery list much in several years, but always shop for bargains, including that senior discount.
CDsuckers
  |     |   Comment #55
Cadavers are an alternate protein source (PETA membership required).
Hojo20
  |     |   Comment #60
I just came from Aldi, even their prices have increased. The mini snack pies (cherry or apple) that were 45 cents for the longest time are now 69 cents. Six pack of plain bagels $1.45 to $1.79.
goldismoney
  |     |   Comment #86
But when Aldi increases the price you've reached the end of the line...
sharon907
  |     |   Comment #89
#86

Our other regular store is Target. They regularly have 20% discounts on food, 10% discounts on Target prepaid cards, 5% for using a Target credit card, other Target Circle discounts, nearly every week

Also have a family member that works there. 10% off everything, another 20% off fresh and frozen fruits and vegetables every day. Some of their foods have increased, but some have not, for years.  And on a good day, the discount is 40%+.

Of course, they have trouble hiring people willing to work.

People who don't work, will explain that "government benefits" also stimulate the economy. So why work?  Just need to increase those benefits, because of inflation.
Robb
  |     |   Comment #165
Eggs were $2.47 and milk $2.95 at Aldi this week.
deplorable_1
  |     |   Comment #23
@PD#6: Oh I also think the real rate of inflation is much higher than what the government numbers are although as we have discussed before everyone's personal rate of inflation can be different. My gas bill alone has tripled and food bill doubled since the Bye done administration has been in power. Then all insurance premiums have gone up for healthcare/home/auto. Utility bills gas/electric both up. I'm liking these higher interest rates but there is no doubt inflation is eating the increase. The FED would need to get rates to 10% for us to beat out inflation but i'll take what I can get and use other strategies like bank bonuses, 2-5% cash back credit cards, tax free income etc. to mitigate the loss as much as possible. If the FED doesn't blink and keeps hiking inflation will eventually come down and yields will be way up by then. This could end up being a very good opportunity if you time it right high yield long term CD's and buying stocks after the market crash that's coming. Or a new house after another housing crash who knows.
Mak
  |     |   Comment #27
I have heat pumps, no gss other than the stove and the hot water heater but I rarely turn the heat on(maybe 10 days out of the year) so it's mostly a/c, don't know if the rate went up or not but so far my electric bills are lower this year than last year and the year before that. My cars are a year older so my license plate fess dropped 16%.  Just got my new car insurance bill for 3 of my cars and I went from $1150.00 last 6 months to $1092.00 this next 6 months.
deplorable_1
  |     |   Comment #37
Well Mak why does it always seem like prices only decrease for liberals and increase for conservatives? Things that make you go hmmm One thing that went down is the price for Biden bumper stickers you can't even give them away. lol
Mak
  |     |   Comment #41
Well dep, I don't know why those costs went down all I know is they did and that's all that matters to me.
Btw it could also be that you don't know how to lower your costs or that you don't know how to shop or maybe you just like to whine a lot...;)
deplorable_1
  |     |   Comment #44
Yeah Mak I'm terrible with finances and never shop around for insurance or other deals. ; )
Mak
  |     |   Comment #46
well dep, I guess that only leaves ....maybe you just like to whine a lot.
CDsuckers
  |     |   Comment #56
Because of the inflation reduction act, of course!
Trumpsters need not apply.
lou
  |     |   Comment #66
$2,200 a year to insure 3 cars. Where the heck do you live? Definitely not California.
Mak
  |     |   Comment #70
#66... Arizona
SmittyInTheCity
  |     |   Comment #47
I would like to balance this conversation by offering a more "liberal" expensive that went up... Let me tell you about my wife and Starbucks... She probably spent 5k there this year. Can't get her to stop. I'm like dude you just spent $7 on that drink and $5 on two piece of bread with egg and cheese slapped between it... A scone and sandwich for the kids... Whew , well,,, that's what has when you grow up Republican, no fiscal responsibility haha . Anyways seems like both parties are wonkers when considering finances. But many factors at play for current situation
CDsuckers
  |     |   Comment #68
Isn't a Starbucks addiction considered "grounds" for divorce?
JimDavis
  |     |   Comment #75
Eating out is the most wasteful thing you can do .

Worse than buying lottery tickets.
SamFam
  |     |   Comment #88
It's also very dangerous to the health...All kinds of highly processed, ultra inflammatory ingredients that cause so many chronic conditions.
lou
  |     |   Comment #125
**** it, I'm eating out.
Bmd357
  |     |   Comment #71
@ pd comment about his 16% inflation.. Your theory is wrong because your assuming your saving are equal to your Bill's. If they were both equal you would be right you would be getting crushed by inflation . But all situations are different If your bills are 40k and go up 16% you pay 6,400 more but if your saving is 200k and your in a 5% cd your making 10,000. That's a net gain or 3,600 That's better the 2% inflation you pay 800 more 1% cd you make 2000. That's a net gain or 1,200 . So it really depends on your personal situation
GreenDream
  |     |   Comment #79
@Bmd357, Putting aside the number P_D pulled from his ****, you are ignoring the fact that inflation lowers the value of every dollar you have, not the just the dollars you spend. Your total purchasing power is still going down even if you are pulling in more than enough to pay the bills in the present.

All your "personal situation" tells you is a subjective how much suffering you feel from inflation, not the objective how much purchasing power you are losing to inflation. The facts of inflation don't care about your feelings.
kcfield
  |     |   Comment #96
Here are the figures verifying the 16% inflation rate when looking at the trimmed mean CPI:
16 percent trimmed-mean CPI is a weighted average of one-month inflation rates of components whose expenditure weights fall below the 92nd percentile and above the 8th percentile of price changes. Benefits: By omitting outliers (small and large price changes) and focusing on the interior of the distribution of price changes, the median CPI and the 16 percent trimmed-mean CPI can provide a better signal of the underlying inflation trend than either the all-items CPI or the CPI excluding food and energy (also known as core CPI). Source: https://www.clevelandfed.org/indicators-and-data/median-cpi
111
  |     |   Comment #115
KC and everyone else - with all due respect to anyone who in fact deserves due respect - this issue, regarding the difference between “this is my own 'personal truth' inflation rate, and therefore I'm angry and drawing this particular line in the sand”, vs. “this is the govt.-anointed inflation rate and therefore I'm going to treat it as Gospel and defend it to the death” - isn't this all a bit ridiculous at some level? Can we agree that everyone is impacted by inflation differently? And that while there are differences in inflation components, there are at least as many differences in the way we all “experience” inflation due to our own personal circumstances, asset mix, expenses, etc.?

Honestly, I'm beginning to think that the purely political discussions were less divisive than the somewhat more recent “inflation camp wars” are becoming.
kcfield
  |     |   Comment #129
111: I agree with and appreciate your point: that there are many differences in the way each of us experiences inflation due to our own personal and financial situations; and I would add that some folks are more skilled than others in mitigating the impact of inflation upon ourselves and our families. I don't think the divisiveness is from readers providing different perspectives on inflation rates (there are indeed different measures) but rather from those who are so focused on defending their own views that they aren't willing to learn from (or at least to hear and consider) the perspectives of others. Since I have less financial expertise than many on this site, I regularly learn from those with different perspectives than my own. 
sharon907
  |     |   Comment #116
kcfield # 96

The "16 percent trimmed-mean CPI" is completely unrelated to the claim of 16% inflation. The trimmed-mean CPI is simply another way to measure inflation, by excluding outliers.

And of course, it is a separate calculation, from the widely reported CPI.
kcfield
  |     |   Comment #128
Sharon: It is an alternative approach to measuring underlying inflation, that is not excessively affected by large price changes – either increases or decreases – in individual items. Does that mean it is "completely unrelated" to the claim of 16% inflation? Perhaps you are right about that; or perhaps it is simply providing a different view or perspective that results in a higher figure than the general CPI number due to "the exclusion of outliers."
JimDavis
  |     |   Comment #22
As a confirmed miser, I already cut expenses to the bone even during flush times.

So there aint much fat to cut for me.

Food inflation is high , but frankly, how much can you eat?
slickwilly
  |     |   Comment #120
Eat less…..get healthy….don’t believe anything that our government/media says…..
GH1
  |     |   Comment #25
Callable 5 year is 5.15 percent currently 530 pm 11/2/2022

Morgan Stanley Bk N A
Callable 11/[email protected] | Callable | Death Put | | MS | Semi-Annual Pay
Rickny
  |     |   Comment #26
Gasoline in my area went up 40 cents last week. My fixed price supply contract for natural gas @ 36 cents expired. Had to go to variable contract and last month was 75 cents. Our Community Electric Supply contract for our county was not renewed and has reverted back to local utility. The community contract was fixed at 6.51 cents is now variable and last month was 10.5 cents. Expect these variable costs to go up.

Eggs are now at $4 a dozen. Last month $2.89.
GregoryG
  |     |   Comment #32
Just bought eggs today for 2.79. My electricity is up 3%, natural gas bill appears the same as last year. Home insurance went up $50/yr, but car insurance went down $35/yr. Gasoline went down 9 cents this week. Guess it depends on where you live
Mak
  |     |   Comment #34
$2.79 is a very low price right now, either they were on sale or some of the bigger players can lock in prices or they can pay a price that is averaged over a month...all different kinds of programs out there.... sometimes at Albertsons they have a sale where they offer eggs for .97 cents when the cost is over $2, why? loss leader, can't buy eggs for that price.... couple week ago Albertsons had the 8oz shredded, bar and sliced cheese for 74 cents a package, try to find cheese like that at .74 cents at regular pricing.
JimDavis
  |     |   Comment #73
eggs 2.79, thats a bargain. They are $4+ where I live
LovinSomeCDs
  |     |   Comment #87
Costco gas in my area. 2.89.
Costco eggs. 4.99 for 2 dozen
But the biggie for my family was moving from the midwest to the south 9 months ago. Income went up 20%, cost of living went down 20%. Nice 40% raise, especially staying with the same company, so pension still in tact. Yes, a real pension.
Mak
  |     |   Comment #33
Ricky...eggs and butter hit records this year, maybe milk too but not as sure, there was bird flu this year which caused the egg prices to shoot up even more than they already were and it also hit turkeys too. Eggs were at a record high then they dropped but now going up again because of shortages from bird flu and also the holidays are approaching too.... butter mkt drooped 27 cents a pound today.


The stores cause more inflation with their markups, an example... years ago we used to sell eggs to the grocery stores at let's say .69 a dozen for large give or take and the stores would mark it up say 40% to .99 a dozen, they would have a profit of $9 for a 30 dozen case... now prices are all over the place but last week we sold eggs to the stores for $2.97 a dozen and they then mark it up 40% so now they will sell them at $3.99 maybe higher depending on the store soooo the $9 profit they used to make on a 30 dozen case is now up to a $36 profit or more per that same case.... I won't even tell you the profit they make on specialty eggs...;)
CDsuckers
  |     |   Comment #58
But those dinosaur eggs are delicious!
LovinSomeCDs
  |     |   Comment #43
I am loving this! Keep jacking those rates up Fed. Oh yeah, and Mr Inflation, if you could go ahead and keep raging on too, that would be grand! I need to lock in some more 7 year CDs, over the next year or so, then when it all does collapse, I need to buy a new convertible for cheap (when the repo man comes knocking on all these people). Housing can crash a little too, so my property tax bill goes down like in 2009, Im not going anywhere. My state has gas under $3.00, and covid created a work from home 4 days a week, win win. This is all so fascinating, cant wait to tweet about it.
lou
  |     |   Comment #67
Yeah, you're benefiting from inflation but have you considered that no one likes you except maybe your family.
CDsuckers
  |     |   Comment #69
Unlike you, he doesn't seem to crave affection (although you are affected).
LovinSomeCDs
  |     |   Comment #80
Lou, you are so wrong!!.....

My family doesnt like me either. ;)
milty
  |     |   Comment #85
#80: Thanks, that made me laugh, which is a pleasant surprise in these contentious times.
slickwilly
  |     |   Comment #122
When the people starving in our streets continues to worsen, and crime gets so bad that a cop will be like trying to find a dinosaur…..good luck trying to keep what you got…..much less collect on CD’s…..
lostsoul
  |     |   Comment #144
Not the End but a big wake up few will like. Some have already seen the truth.. some are still in denial but we all will share in the pain in the end.
w00d00w
  |     |   Comment #45
not much change in the treasury daily yield curve with this announcement. 2y moved the most, up 7 bps. 7 day yields on money market funds should quickly move into the 3.5-3.75% range. Core PCE still forecast to be above 5% through this month, at least. two more CPI readings, both currently forecast in the low 8s before next Fed decision.
QuickSilver
  |     |   Comment #61
Regarding saving strategies, I've become a fan of Treasury floating rate notes. They reset weekly at a spread to the 3mo bill auction results and pay quarterly. The most recent issue came at Bills+14bp and it reset Monday at 4.21%. They tend to reopen each new issue two times, so they get to be large enough ($50+ Billion) to support good liquidity. You can find details at Treasury Direct and elsewhere.

The spread does change over time, so there is principle risk. I can live with that given the 100bp premium to most money market funds.

The downside would be an exogenous event that has the world running for Treasuries out of fear. The rate would drop much more quickly than money funds. They work well in a rising rate environment, but they underperform when rates drop. I don't see that happening anytime soon.

Treasury is working toward issuing FRNs that float off SOFR, the replacement for LIBOR. That is likely to also be an attractive alternative.
LovinSomeCDs
  |     |   Comment #83
I (like many of us on this thread) did NOT vote for this in 2020, but man oh man, am I benefiting from it!
dale26s
  |     |   Comment #93
While we know its not certain, as we do expect more Fed increases to come, even if lesser in amount, isn't it a pretty safe bet to assume we will see continued increases in cd rates? I'd also appreciate comments on when people are thinking it may be a good time to lock in longer cds.
sams1985
  |     |   Comment #94
I've been lurking on here since April 2022. Already made a mistake last month by buying one too early bc we' had all been waiting months for a mythical 4% cd.
Let's wait until this month's inflation numbers come out. Then we'll know what's going to happen in December. My best guess is sometime in 2023. Between Jan-March. I think we should see high 5's by then. Maybe even some 6's. Keep perusing this board now and then to get a general idea of what's happening.
dale26s
  |     |   Comment #168
For what it's worth fixed income guy i spoke to thinks future rate hikes are priced in already...people might agree or just got spooked by the election as all the fidelity 5 yr noncallables are gone today
sharon907
  |     |   Comment #169
If you lurk long enough, you will see some people always claim things will become clear in 4-6 weeks.
LovinSomeCDs
  |     |   Comment #99
Dale26,
I have met so many people who will keep cash liquid for 6-12 months waiting for the peak CD rates. Even after they think they locked in the peak rate, I show them the final maturity dollar amount of their new CD, then do the math if they would have taken the lower APY from 6-12 months ago and add in the 6-12 months of interest they missed out on. Most of the time, the numbers are about the same, or the difference isnt worth the "work" they put in. Then, not to mention, you dont know what rates will be at the end of the 5 or 7 year CD. So, what if by opening the 5 year CD exactly 12 months ago, it matures during another peak time(?). For example, I opened some 5 year CDs in 2018, which will mature in 2023 (which is shaping up to be perfect timing)..... BUT when I look back, rates peaked in 2019 (oh crud, I missed out on all that extra money by locking too early?!), which those will mature in 2024....which COULD BE too late...we may be in a recession by 2024 with ZIRP back. You see what I mean? But this is all just my opinion.
spentcattle
  |     |   Comment #110
Yes I think thats likely. The only scenario that could change that is that the high rates all over the world causes some kind of financial crisis and the fed has no choice but to stop and ease and we go back to deflation. Maybe thats a one in four chance. One thing you can do is buy high rate 5 plus percent callable cd's that arent callable for at least a year so its really a pseudo one year cd if called.
Mals
  |     |   Comment #98
The much demanded 5%, 5 year is finally upon us via brokered CD at Schwab Capital One.
milty
  |     |   Comment #100
And looks like liquid rates may soon be hitting 4% with MB now posting 3.82%.
deplorable_1
  |     |   Comment #113
Exactly milty so everyone who is saying "You are missing out by waiting to lock up" lost access to their liquid cash and may even be earning a lower rate on their CD's with 4.5 years to go or face a penalty for early withdrawal. Not to mention plenty of liquid cash seems to be required for bank bonuses which pretty much equates to 7% 2-3 mo. CD's. In other words you are not missing out on anything by waiting unless you are lazy and just keeping your cash in some low earning account. I have been busy tripling my so called "passive" income this year.
lou
  |     |   Comment #114
At least with direct CDs you can pay the EWP (hopefully it's 6 months or less) and purchase CDs when interest rates peak. I look at it as like buying a put, where I protect my downside while still giving myself flexibility to cash in on higher rates. If you own a 4% 5 -yr CD and rates go to 6% or higher, paying the EWP is a no-brainer.

The mistake many on this board are making is buying brokerage CDs where the drop in the market value of the CD if rates go to 6% or higher will be crushing. Effectively, you will be stuck in those CDs for the duration of the term. There are a handful of posters who have been buying these brokerage CDs for the last two months. They are being seduced by the higher rates, something they might regret later on.
deplorable_1
  |     |   Comment #123
@lou: So the brokered CD's have what basically amounts to a larger EWP in the event that rates keep rising? Is this because if you try and sell them early they are worth less? So just like a stock you have to time your CD buys so they don't lose value i'm guessing.
lou
  |     |   Comment #126
That's right, they are subject to market prices based on current interest rates. So if you own a 4.5% 5-yr brokerage CD and rates go to 6% or higher, the drop in market value or the price of the CD will be sufficiently large enough to keep you from selling it. The incremental interest you can earn from a new CD has to exceed the old CD by a pretty large margin for it to make sense. I look it as a breakeven analysis. Preferably, if I am buying a 5-yr CD and the incremental interest exceeds the EWP in 1 yr or less, then I am happy.
Mak
  |     |   Comment #127
#114.....you are correct on the downside to brokered CDs:
1-- If the interest rate goes up and the value goes down too much you won't want to sell because of the hit you would take, also if the interest rates go down and the value goes up you probably still won't sell because the rates are down that you would get too so if you buy brokered CDs you should plan on keeping them.

2--imo you should always have a mix of direct CDs and brokered CDs, I like direct CDs for that reason and if you want to break a direct CD and have a low enough EWP that could be beneficial.

3- I also like brokered CDs because it's much easier to stick them in my trust account, otherwise I would have to open up a trust account at numerous credit unions or banks and a lot of them won't do it.

4- another thing I like about brokered CDs is they are much easier to stick in my Vanguard IRA then opening a bunch of IRA accounts at individulal institutions and them mess with transferring funds.

5- Not a problem for me because I keep a record but if you can't give maturity instructions before maturity, some you can and some won't let you, however if you forget they could be renewed at a lower rate... with brokered CDs that is not a worry.

6- I ladder my CDs so I always have some maturing... I have about 20 maturing the rest of this year and 2023.

7-- Waiting for the highest rate sounds a lot like market timing, doesn't always work out. I look at buying CDs in the same way I look at buying stocks or for me mainly index ETFs... many people wait and wait for the bottom and then are never able to pull the trigger because they keep waiting for lower prices so in the same way you ladder CDs is the same way as buying stocks as they get more reasonable... no one knows where for sure either are going so you look longer term... short term thinking again does not always work out.

8-if someone knows hoe much it cost them to live then that person should be able to figure out what they need from their investments.

9- the most important thing you are leaving out is, how much does the person have to invest... if you don't have a lot of money to invest maybe waiting for higher rates so you could put it all in at once is best but say the investor has quite a bit to invest, changes everything.

10- finally, if you are the kind of CD investor that feels the need to take an EWP penalty then brokered CDs aren't for you,... I don't happen to be that kind of investor mainly because of  laddering....not that I have never taken an EWP because I have but very rarely so all the more reason to have both.
lostsoul
  |     |   Comment #145
Thanks for the info. Im still playing around with Fidelity CDs and got a little 6mo'er. I like having everything in one place.. the main buy will be in a month or 2. I kind of wish they had a better view to look at them instead of it just dumped with the rest of the stocks in a list. Maybe I can figure out how to separate it into different accounts. I need to hit youtube for Fidelity for Dummies.
yfh
  |     |   Comment #148
Just wondering how to calculate EWP into the APY say 4 year CD at 5% 270 day penalty.
Mak
  |     |   Comment #149
It all depends on when you close the CD.. I'm not going to give you exact numbers but I'll try and give you an idea.
Say you open a $100k 4 year CD with your 270 day penalty so basically a 9 month penalty. The penalty would be about $3744, if you closed after 1 year that $100k CD would have earned about 1.25% for the year, now if in a taxable account you can take the $3,000 loss off your taxes, I don't know your tax rate so you would have to figure that out. If you want to buy another 4 year CD to make up that loss in a year you would need the new CD to pay you that much more than the old one in a year's time. If you kept the CD 2 years and then closed it you would have earned about 3.12% a year for those 2 years after the EWP is taken, a little better when you consider the deduction on your taxes..

I might not be exact because I did it quick on paper but I think I'm pretty close.
yfh
  |     |   Comment #150
@Mak Thank you. I didn't consider the tax situation. It's a good point.
andybuji
  |     |   Comment #101
3000 lots sold out within a few hours at Vanguard. I grabbed some.
Mals
  |     |   Comment #102
Also, saw a 5.3% callable 10-Year on Schwab. If it were not callable I would be very tempted. I picked up a little bit of the 5 year/5%, and a little 3 Year/4.95% Just filling out the ladder with almost 200bps higher than my 3% brokerage money market account. Still keeping plenty of powder dry for more adds as we tick up. Its great to be liquid right now. As much as I want to wait it out for even higher rate opportunity, I am losing too much real money (150-200bps) everyday by not being invested at 4.5%-5.0%, either in US Treasuries or brokered CD's. Trying to balance the need to invest with being more patient. Guessing I am not alone with this conundrum.
sams1985
  |     |   Comment #106
I'm having the same dilemma. I want to jump in but i'm convinced CD's are going to hit 6% in early 2023. Losing 200 basis points now monthly vs losing potentially 100 basis points over 5 years on a large sum of money. The math still says to wait.
spentcattle
  |     |   Comment #108
Sooner or later the high rates break the economy we go into recession and rates plunge. Very Hard to say if we get well into 5's before that happens. I look at it where they were last year...
dale26s
  |     |   Comment #134
Since liquid rates are heading toward 4% , doesnt it seem we should be more patient.? Sams 1985 comment makes sensed
spentcattle
  |     |   Comment #161
On some of these callables I'm looking at it as a one year cd if its callable a year from now and if it doesnt get called you may miss a bit on upside but...There was a 5.15 ten year one that is callable in a year
Robb
  |     |   Comment #103
Thanks Mak I’m guessing we will be seeing more of these offerings near term. Still seeing the offering available at my brokerage.  I’m also looking to fill out years 3-6 in my ladder as other CD’s mature.
Mak
  |     |   Comment #107
Robb...That's MALs.... Vanguard has some right now and Fidelity has a 12,000
Mals
  |     |   Comment #104
Schwab is sold out now too
bobby_h
  |     |   Comment #109
Curious if anyone had any IRA CDs with Cap1 earlier this year? They "closed down" their IRA business earlier this year and unless you were able to get your money out in time your money was to be "swept" into another firm...and there was a short time to make happen. It took me over 10 phone calls to them and 2 or 3 to my 401k folks (where I sent the check) before I was able to finally get the money over. Painful. In fairness, they did credit the interest (I had a little over a year left) to full term. I see they're prominent on brokered CDs on VG as I type this, but for me, I'm steering clear. If anyone had a good/great experience (with IRA shutdown) please share...
spentcattle
  |     |   Comment #111
CD rates in 2000 seemed to be around 5% on five year cds. 22 years later they make it back up there.
For me this is probably good enough not to say they cant go higher.
bobby_h
  |     |   Comment #112
I was getting 5% on 1 year CDs around 2006. I remember that year as I was late to the game starting college savings...as in 2 years before my oldest of 3 started college! Now all in the rear view mirror... I'm moving money now and will be happy to get 5%. 2% (+/- 0.2%) seemed to be tops for a 5 year from 2013 until 2017 or so. Because of this site I was able to lock in an average of ~3.3% about 3-4 years ago. Thx to Ken!

ps I don't see it mentioned much here but my take on inflation is that it's predominantly caused by squeezing of our energy supplies...as almost everything has material/transportation costs associated with the cost of energy. I suspect the "new new" costs will stabilize if/when the supply/demand of gas/oil works itself out to an equilibrium. I don't anticipate any deflation and thus our collective net worth just took a 15% permanent hit.
Mak
  |     |   Comment #131
261,000 jobs created.. looks like the fed is having a hard time so far breaking Biden's strong economy... don't worry though, if the republicans get back in those job numbers should drop very quickly....lol
deplorable_1
  |     |   Comment #132
Mak comment #114 was amazing why did you have to ruin it with this one?
Mak
  |     |   Comment #135
dep... I was bored and wanted some action....;)
Did you mean comment #127?
P_D
  |     |   Comment #136
"Biden's strong economy"

Haha!  Good one!  When Biden took office the real GDP growth rate was 6.3%.  Now it's 2 something after several quarters of negative growth and that's a "strong" economy?  You have quite a sense of humor there Mak, I'll give you that.

Terrible job situation.

The Civilian Labor Force Participation Rate (the real measure of how the job market is doing) FELL from September to 62.2 in October. It was 63.4 in February 2020 just before the China virus hit. Going on 3 years and the CLFPR is going nowhere.

Too bad the numbers don't include the Democrat's new IRS agents or it would probably be about 90.  But we'll still be paying the taxes to go with that anyway.
Mak
  |     |   Comment #137
You say potato, I say potahto...;)
milty
  |     |   Comment #155
#136: In 2020, the GDP grow rate was -3.49%. In 2021, it was 5.70%. In 3rd qtr 2022, the rate is 2.6%, which is still better than most of the former guy's annual numbers.

Please post where the former administration used the CLFPR as the real measure. (All I recall is the constant cheer leading for the stock market and demanding negative Fed rates.) However, it was 63.0 in March 2016, falling to 60.2 in April 2020, only shortly after the Trump Easter Virus hit and surprisingly did not go away.

Regarding those 87K IRS agents you resent, which will replace the 50K that are retiring, perhaps knowing that the U.S. military employs 2.2M (active and reserve), FBI: 35K, CIA: 22K, NSA: 32K, DHS: 240K, plus thousands in other civilian departments will ease your troubled mind as to just how insignificant adding 37K jobs to the IRS really is. Well, unless you happen to be someone who undervalues his assets for taxes and overvalues them for loans.
Kerry2
  |     |   Comment #156
P_D, I believe you know that most of the posters are dems supporters and totally brainwashed by the "MSM", there is no point to explain the truth, to them sounds as conspiracy theory. Unless the news (lies) comes from "CNN" nobody believes the real truth coming from the alternate media.
Mak
  |     |   Comment #157
Kerry... or there are some trump supporters on here that are brainwashed by alternative right wing loon sites and are consumed with conspiracy theories.

Btw.. I don't watch any cable news shows, maybe you should turn fox off.
CDsuckers
  |     |   Comment #162
I get all of my news from CN (Cartoon Network).
Actually, this website is pretty cartoonish.
On another financial website that I follow, some right wing fool started spewing racist conspiracy theories.
The owner of that site promptly deleted the comment and made the following statement.
"Dear readers: Some of the comments on this article were getting off topic and divisive. Please stay on topic. Thank you."
This site doesn't have the spine to enforce it's own comments policy.
slickwilly
  |     |   Comment #172
Your giving them too much credit….in order for them to be brainwashed ….they need a brain….
Mak
  |     |   Comment #138
P_D...
I used to own a few state general obligation munis but they are done now, any recommendations on munis or muni bond funds?
P_D
  |     |   Comment #139
I would stay away from bond funds... no maturity...you are at the mercy of the markets with no escape hatch.
Mak
  |     |   Comment #141
I've always bought state gen obs and rather own those but nothing great for AZ or any of the other states I looked at....never owned a muni fund but they are going in the right direction. I'm not looking to buy any at this moment but if rates keep moving up depending on the yield and duration at some point it might not be bad to average in.... just started doing some homework on them..... I picked VTEB and FTABX so far but just started looking.
Kerry2
  |     |   Comment #154
To all savers, note:
Enjoy it while it lasts, we are all on the hook for $1.4 trillions a year just for the interest the treasury pays to the savers. After that, the party is over, the dollar and the savings will be nullified by a self destruction and euphoria and celebrations on the high interest rates on the savings.

https://www.zerohedge.com/markets/us-debt-servicing-costs-skyrocket-14-trillion-interest-payments-deck
Mak
  |     |   Comment #158
You might be confused....the interest payments on the debt are expected to rise to $1.2 trillion a year in 10 years from now....or you are mistaking it for the $1.4 trillion budget deficit which includes a lot more than what the treasury pays to the savers. Not all the debt is at the high rate, most is at a much lower rate still which eventually will get worse if interest rates stay high or go higher as interest rates on U.S. Treasury securities rise, so too will the federal government’s borrowing costs. The United States was able to borrow cheaply to respond to the pandemic because interest rates were historically low. However, as the Federal Reserve increases the federal funds rate, short-term rates on Treasury securities will rise as well — making some federal borrowing more expensive. Expectations about short-term rates and inflation have already pushed up longer-term rates as well.

In late May, the Congressional Budget Office (CBO) projected that annual net interest costs would total $399 billion in 2022 and nearly triple over the upcoming decade, soaring from $442 billion to $1.2 trillion. However, if inflation is higher than CBO’s projections and if the Fed raises interest rates by larger amounts than the agency projected, such costs may rise even faster than anticipated.

When I used to belong to a blog for stock trading anyone that posted a zero hedge article was banned... true story.
milty
  |     |   Comment #160
Per MediaBias: "Overall, we rate ZeroHedge an extreme right-biased conspiracy website based on the promotion of false/misleading/debunked information that routinely denigrates the left. ... The website is registered in Bulgaria under the name Georgi Georgiev, a business partner of Krassimir Ivandjiiski.."
111
  |     |   Comment #171
"in Bulgaria under the name Georgi Georgiev, a business partner of Krassimir Ivandjiiski." Hmmm, sounds like some of Hunter B.'s buddies...
CDsuckers
  |     |   Comment #163
The whole Trump thing comes down to demographics.
As of the 2020 census, the number of whites went down for the first time ever.

There were around 191.7 million white people in the U.S. last year, down from 196.8 million when the last census was taken in 2010.

The share of the white U.S. population declined further from 63.7 percent in 2010 to 57.3 percent in 2020.

Once whites become a minority they have no use for democratic elections.
Now that the writing is on the wall, the guns will come-out (again).

https://www.statista.com/chart/25535/us-population-by-racial-ethnic-group/
dale26s
  |     |   Comment #170
Now that the inflation numbers came down, and noncallable 5%'s have disappeared, any reason to think they may return?
Buckeyes
  |     |   Comment #173
Im not sure why a 7.7 cpi is considered awesome. just because it sucks less than expected, but it still sucks. I say rates stabilize and inflation continues to climb. at least that's what the gas station here in my village says.
Choice
  |     |   Comment #174
And the month to month is?
Buckeyes
  |     |   Comment #175
It's an improvement Choice but no way does Powell bring rates down anytime soon. He's a remarkably consistent fed chair. Im happy wasting away in short term treasuries and bonds for now as I don't believe in this rally, yet. I say the days of non callable 5 % bonds are not dead yet. Interest rates, which really over a long term are not really elevated, will remain what some feel are elevated for some time to come. Hell my mortgage rate was 9 percent years ago. People nowadays are spoiled. Can't afford it, don't buy it!
dale26s
  |     |   Comment #181
Hope you are right I thought hone for good but cnbc people this am think rates could go up to 7$ inflation not cooling enough
Buckeyes
  |     |   Comment #176
anyone sniffing around sallie mae's 14 month NP CD paying 3.75%? That blows Ally away by 65 bps, although i'm not sure if that's an accomplishment anymore. I don't really want my money locked up so this seems like a darn good alternative.
Sardonic
  |     |   Comment #177
How concerned should we be about the 10% decline in Treasury yields over the past month?

I'm asking since declining Treasury yields leads to lower CD rates.
lou
  |     |   Comment #178
I would give you an answer but I am afraid it might seem sardonic. :)
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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...

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

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