MoneyRates Blog
Could Bank Rates Get a Boost from the Fed?
The Federal Reserve is said to be considering how to unwind the various stimulative measures it has taken over the past year and a half. Those stimulative measures include lowering the short-term rates at which the Fed makes money available to banks, and actively buying bonds to lower longer-term interest rates. The Fed’s actions have been influential [...]
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What Do Home Sales Have to Do With Your Savings Account?
Surely one of the lessons that all bank customers should learn from the bank meltdown of the past two years is that in the global economy, links between people–and people’s money–are complex and multiplicitous.
The connection between mortgage holders and savers, for example, is a storied one. Banks take deposits from savers and then lend out [...]
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What Can Brown Do for Bank Rates?
When Republican Scott Brown won the special election to fill the Senate seat long held by Edward Kennedy, the initial focus was on how the shifting balance of Congressional power could slow down, dilute, or even doom health care reform. With banking reform another hot topic in Washington, it is also worth considering what this [...]
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Would Removal of FDIC Insurance Actually Help the U.S. Banking System?
As we blog, Larry Kudlow is hosting a discussion that includes talk of abolishing FDIC insurance as a way to make the banking system safer. At first this seems totally contradictory, but upon closer inspection, this view may have some merit.
The term coming into use is “narrow banking.” That is, banks that hold money on [...]
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Moderating Inflation Offers Some Relief for Bank Rates
Bank rates have been in a squeeze lately. It doesn’t matter whether you look at savings account rates, money market rates, or CD rates, the level of bank rates generally has been low and showing little sign of movement in recent months. Meanwhile, inflation has been on the rise — and that’s where the squeeze [...]
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What Will Today’s Savers Teach Their Children About CDs and Savings Accounts?
The sixth annual Wealth and Values survey from PNC bank came out recently, and it is worth a read for anyone who’s interested in the savings patterns and attitudes happening today.
One interesting, potentially overlooked tidbit from the survey came from this statement: “The events surrounding the recession have prompted me to have discussions with my [...]
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Of Bank Rates and Bonuses
As the banking industry weighs its options for fighting the proposed federal tax on large institutions, it’s worth looking at one of the underlying issues which prompted the proposal — executive bonuses.
Ostensibly, the purpose of the tax is to recoup some of the money spent on rescuing the banking industry, and in doing so start to [...]
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President Obama’s Bank Levy Program Cannot Be Good for Bank Rates
President Obama intends to impose levies on up to 50 large banks that benefited from taxpayer bailouts.
This may be a good idea for other reasons, but it’s very difficult to see how this will not be a negative for CD rates, money market account rates, and savings account rates.
Jamie Dimon, CEO of JPMorgan Chase, said [...]
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Trickle Down Theory: Would New Tax on Banks Come Out of Bank Rates?
The White House is said to be weighing alternatives for levying a special tax on banks to recoup some of the taxpayer money that went to bailing out several of the nation’s largest banks in 2008 and 2009. This seems like a well-intentioned but misguided idea.
On the surface, there is some logic behind the proposal. First [...]
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Bloomberg vs. The Fed: What It Means for CDs, Savings Accounts, and Mortgages
Possibly the most underreported massively important financial news story occurring today pertains to the freedom of information lawsuit Bloomberg News Service has brought against the Federal Reserve.
The outcome of this case, which is currently in the U.S. appeals court, could have tremendous implications for certain banks, as well as the investors who hold CDs, money [...]
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Dodd’s Departure a New Twist for Bank Reform
The decision by Senate Banking Committee Chairman Christopher Dodd not to pursue re-election was an unexpected development which puts yet another wrinkle in the path toward new banking legislation. For depositors, it might be a mixed blessing.
Late last year, Senator Dodd proposed sweeping and stringent banking legislation. It was quickly apparent that he had over-reached, [...]
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Want Higher CD Rates? Hope for Lower Unemployment
Obviously everyone hopes that the unemployment problems in the U.S. will abate. But CD investors have special reason to hope that unemployment goes down. When unemployment goes down, CD rates should rise.
Rarely would there be such a strong correlation between employment trends and CD rates, but today it seems like these two really are tied [...]
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With Mutual Funds Less Popular, Banks Should Continue to Hold Plenty of Deposits
November of 2008 shook a lot of people’s confidence in supposedly safe mutual funds. According to a recent report from The Wall Street Journal, that lost confidence has not yet been re-found.
In fact, in November of 2009, investors pulled $2.1 billion out of mutual funds focused on holding stocks. Exchange-traded funds, or ETFs, received some [...]
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Low Mortgage Rates Could Represent a Long-Term Risk for Banks
Low mortgage rates have been hailed as one of the saviors of the banking system. In the long-run though, they could prove to be yet another form of risk.
While the Federal Reserve normally contents itself with managing very short-term interest rates, it took extraordinary measures in the banking crisis to bring longer rates down. The [...]
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Signals Point to Higher Bank Rates, but It May be a Rough Journey
Bond yields continued their march upward last week, and it should only be a matter of time before savings account rates, money market rates, and CD rates start to follow. However, that doesn’t mean it will all be smooth sailing ahead for bank rates.
The upward surge in bond yields during December could be attributed to [...]
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