Want Higher CD Rates? Hope for Lower Unemployment
January 07, 2010
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 together. The Federal Reserve has promised to keep interest rates low until the economy improves. CD rates generally follow interest rates offered by the federal government.
Banks have been given hundreds of billions of dollars, and many prominent U.S. companies are returning to strong profitability. But one area of the economy that has not yet improved is unemployment. So many Americans feel like the rich are getting back to being rich and the middle class are on the way to becoming poor.
The Fed is using a strategy of low interest rates to spur companies to borrow money so that new staff can be hired. It is distinctly unclear whether this strategy is working or will work in the long run. But the government must try to do something, right? For the moment, low interest rates for an "extended period" is a big part of that something.
Want higher CD rates? Hope for lower unemployment.
It appears, for now, that you cannot have one without the other...
Mike666
9 January 2010 at 9:22 am
A new fairy tale - unemployment linked to interest rates.
Strange Banks and wall street lost money and had to borrow money.
The Demand and need for money was very High . The Banks and Wall street are high risk Borrowers . High risk borrowers are always charged high interest rates because of the extra risk they bring.
Why is Ben Barnyardkee allowing High risk borrowers( banks and Wall street ) to use the money of American citizens at historic low rates?
Mike666
9 January 2010 at 9:09 am
Tim get out of dream land. The Benny wall street puppet has given the banks and wall street all the money American citizens saved for almost no interest.
There is no silver lining this is the top % of 1 percent of the population getting to use all Americas citizens money to line their pockets .
Unemployment will stay high because why do companies need American employees ? Ben gave the Super rich our money and now the super rich can use our money to invest in countries with low labor cost and steal their money.
Do you really thing Ben or Obama care about what happens to the Average ?When we are broke and penny less we are eacy to control.American?
Whats the point
Tim
7 January 2010 at 11:07 pm
It makes sense in some other ways too,because the argument could be easily made that those who have money in the bank should be able to make more, when the ship is on a stronger course for all.
The only thing I would add by way of unemployment is that more folks would do well to know that there are ways to start creating employment for themselves- at least during their down-time, rather than waiting for an employer. In this Internet age we live in, there are reputable and manageable ways to do that.
This article came out today on this- http://EzineArticles.com/?id=3526840