Fed Rate Hike! Interest Rate Predictions and CD Strategies for 2019

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The Fed defied pressure and hiked rates today. A rate hike was the consensus, but there had been increasing pressure for the Fed to pause. This is the fourth Fed rate hike of 2018 and the ninth rate hike since the Fed started to raise rates in December 2015. Here’s that all important paragraph in today’s FOMC statement:

In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent.

This policy action was an unanimous decision.

There are signs in both the FOMC statement and in the FOMC projections that future rate hikes will be fewer and more gradual than this year.

The FOMC projections now show two hikes of the Federal funds rate in 2019 instead of three that were shown in September. For 2020 and 2021, the projections show a federal funds rate in the range of 3.00% to 3.25%. That suggests that there will be only three more rate hikes.

Future FOMC Meetings

The next three FOMC meetings are scheduled for January 29-30, March 19-20, and April/May 30-1. The March meeting will include the summary of economic projections. All future meetings will include a press conference by the Fed Chair.

What Savers Should Expect in 2019

As we have seen in 2018, online savings account rates have followed the federal funds rates. We now have many online savings account yields between 2.00% and 2.50%. I expect that will continue into 2019. If we do see two Fed rate hikes next year, the target federal funds rate will be in the range of 2.75% to 3.00%. If that does happen, it’s likely that we’ll see online savings account rates around 3% by the end of next year.

CD rate forecasts are more difficult. Uncertainty in the future economy may suppress long-term CD rates. Thus, 5-year CD rates may not be much higher than savings account rates. So even if we see online savings account rates around 3% by the end of next year, we may not see any widespread 4% 5-year CDs.

Lastly, don’t hold your breath for deposit rate hikes at your brick-and-mortar banks. As I showed in my recent rate trends chart, the average savings account rates at brick-and-mortar banks and credit unions remain low.

Deposit Account Strategies

One strategy for your safe money is to keep your money in top savings accounts, and wait for signs that we’re at the top of the rate cycle. For example, if we have several Fed meetings without a rate hike and the Fed’s economic projections become more pessimistic, that would be a strong sign that we’re at the top of the rate cycle. Then it would be the time to lock into long-term CDs. While the money is in savings accounts, you can keep an eye out for those hot CD deals.

This strategy makes it important to choose internet banks that have solid ACH transfer capabilities. If you find a hot CD deal or if your internet bank falls behind on rates, you’ll want to be able to easily and quickly move your money. You don’t want an internet bank that has small ACH transfer limits or slow ACH transfer speeds.

It’s important to remember that there could be surprises in future interest rates. Conditions can change fast, and we may not recognize the significance until rates have already responded.

If you want to keep things simple for your safe money, CD ladders are a tried-and-true way to invest in CDs. The ladder ensures you take advantage of higher rates as interest rates rise. The ladder also ensures that you’re taking advantage of longer-term CDs that protect against falling interest rates.

You may want to favor shorter-term CDs for your ladder as interest rates keep rising. Top 5-year CD rates aren’t much higher than top 3-year, 2-year and 1-year CD rates. When it appears that we’re at the top of the rate cycle, it would be time to start switching to 4-year, 5-year or longer-term CDs.

One thing to beware of when deciding on a CD ladder with shorter-term CDs is that the short-term CD rates at many internet banks are too low to be useful. These are 3-month, 6-month and 9-month CDs with rates that are much lower than their online savings account rates. These short-term CDs don’t make any sense. If you’re starting a CD ladder, don’t choose short-term CDs with rates under savings account rates.


Comments
Jennifer
Jennifer   |     |   Comment #1
I was simply thrilled by the rate hike today (I had been terrified they might not do it). I am hoping for a few long term CD deals after the 1st of the year.
Deb
Deb   |     |   Comment #73
I’m looking at a 3.1 percent CD for 39 months at my local brick and mortar bank!! I think that’s pretty **** good!! And I can even walk there!!
DAfan
DAfan   |     |   Comment #2
Treasury rates dropped after the Fed rate hike, probably due to future uncertainties in world economies and supply/demand for safe assets.
john longfellow
john longfellow   |     |   Comment #3
Are you serious??
alan1
alan1   |     |   Comment #8
DAfan -- What's your source for the statement that "Treasury rates dropped after the Fed rate hike"? I was periodically checking Treasury rates on Wednesday -- it was my impression that they dropped before announcement of the rate hike, and didn't particularly drop after the increase. But that's just an impression -- I may be incorrect.
Thanks.
DAfan
DAfan   |     |   Comment #9
alan1 I was looking at the 10-year on Bloomberg which is now even lower at 2.75%. And the 2yr and 5yr are inverted. Not good.
Robb
Robb   |     |   Comment #12
The 10 year note which was down mildly ahead of the Fed meeting definitely fell post the Fed hike...was tracking it much of the day. Source...my eyes.
alan1
alan1   |     |   Comment #13
I'm not following you. 2yr-5yr inversion goes back to December 4. https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
As to 10-year, as quoted on Bloomberg, 2.77% as of 7:15 Eastern time.
https://www.bloomberg.com/markets/rates-bonds/government-bonds/us
Robb
Robb   |     |   Comment #14
@Alan...here's an intraday chart of the 10 Year Note...note the selloff post the 2 p.m. Fed announcement:

http://schrts.co/txWKUz
larry
larry   |     |   Comment #20
I thought I saw on CNBC the other day the the 10yr has a 20% return so far this yr?
john
john   |     |   Comment #4
it took 8 years to go from zero to 3.5 %, savers have been destroyed espec seniors,8 yrs to a senior is at lifes end just when we needed it, now stocks fall and mkt investers who made millions are crying, THERE NEVER SEEMS TO BE ANY TEARS FOR SAVERS AND NOW THE 10 YR TSY DROPS FROM 322 TO 278 I GUESS THERE IS NO POINT IN SAVING
Robb
Robb   |     |   Comment #5
We've seen a number of CD deals in 2018 from 3.75-4.08% but you had to act quick to lock in because they did not last long. The most recent being the 4.08% Garden Savings 48 month deal in November and the 3.75% Navy 40 Month IRA. I agree with Ken that there is no assurance long rates will be going up much if at all given the recent action in the 10 Year Note which has fallen from 3.24% in early November to 2.77% as of today's close.
Mike
Mike   |     |   Comment #6
Mkt investors take risk though. CD investors don't. The 'market' doesn't owe you a high rate of return for taking no risk.
john longfellow
john longfellow   |     |   Comment #7
Mike, you have that backward. For governments around the world to constantly bail out "risk takers" makes people unwilling to take real risk.
Mike
Mike   |     |   Comment #11
If that's the case, why don't you go ahead and take the 'risk' that is being bailed out by the governments then? Seems like a free lunch, high returns for risk that doesn't exist due to gov't bailout. You can make way more than CDs! It's a no-brainer!
Brokered
Brokered   |     |   Comment #18
#7
I know several market-based risk takers that lost a whole lot in past downturns and not one was ever bailed out. When the banks were "bailed out" every saver with an account was too because there wasn't enough in FDIC coffers to cover a fraction of the damage. Savers are at the bottom of the food chain which is clearly reflected in the rate of return.

I remember my frugal mom complaining that she wasn't earning her usual 5-6% on her savings. A decade later she passed away with a net worth of $250K. She lived a great life, owned her own residence, owed no one for decades and gave freely to family members in need. In her younger years she was a solid small-time investor and in later years an extremely wise saver.
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MMMM
MMMM   |     |   Comment #49
God Bless your smart mom.
JimDavis
JimDavis   |     |   Comment #10
There's no principle risk, but you risk losing buying power.

I prefer that risk to market risk myself .
dollarsncents
dollarsncents   |     |   Comment #15
@#6, You are only partially right with that comment.

CD investors were sacrificed and literally cheated when the Feds lowered the interest rates and kept them ARTIFICIALLY LOW for so many years in order to prop up the markets and keep those investors happy.
Mike
Mike   |     |   Comment #16
@#15, how were they 'cheated'? Didn't they have the option to put money into the 'propped up' markets and earn a better return? The FED raises and lowers rates all the time. Just because savers/investors made choices that, in retrospect, ended up being poor (not going into 10-20 year bonds when rates were much higher), doesn't mean they were 'cheated'. It just means they didn't invest optimally. Why is the FED to blame for the decisions those savers/investors made?
payl sion
payl sion   |     |   Comment #27
MIKE

You and every other small individual investor is not a factor in bail outs.

Large banks, rich private donors, Trump kin folk. They get bailed out, not the rabble.
Think about it
Think about it   |     |   Comment #69
When your principle loses value (money is supposed to have a just value i.e. unchanging) because the fed uses policies that destroy the value of your money (principle amount) through inflation and then do not return even the amount of value you had originally that is nothing less than theft.

historically the fed had always offered interest rates that did not destroy the value of money in bank accounts for very long. By refusing to give savers the amount of interest that the feds inflationary policies stole from savers for well in excess of a decade savers were stolen from.

Those who invest in various things such as stocks, land, and precious metals are gambling that in the future they will make money knowing they could lose money instead. Those who have placed in a bank their savings equal to 10 years (or whatever time frame) of their labor into a bank do not expect (or deserve) to get back a "safe investment" that has lost months or years of work from an institution designed to keep the fruits of their labor safe from all risk.

There is nothing inherent about parking money in a safe place that creates a risk of loss as long as insurance covers any potential problems which FDIC, FSLIC, and FCUA are designed to do. Only the government abandoning the gold standard (unconstitutionally see U.S. Constitution Article 1 section 10) has allowed money to lose value. Money according to a common law maxim of law is a just medium of exchange. A just medium of exchange by definition does not lose its value. By allowing inflation to occur until over 96% of the moneys original value has been destroyed since 1913 the people are constantly robbed by the fed.

When I put money in the bank it is safe. I expect if I put in 10 years of labor for safe keeping that I will get a minimum of 10 years of labor back whenever I take my money out of a bank. Leaving with some small amount of interest when my old labor is taken out of that bank is a bonus. The safe keeping of all of the people's labor that they put into a bank for safe keeping (as demonstrated by dollar bills) and used to generate savings for the small cash investor is a primary job of the federal government that is not done constitutionally per original intent.
Owlice
Owlice   |     |   Comment #70
Just a tad prolix and verbose in its expression, Think, but I feel your pain. It is only going to get worse.
Old As Dirt
Old As Dirt   |     |   Comment #17
Ah, you guys.
The FED did what it had to do to prevent another Great Depression.
And, QE was the only thing that prevented interest rates from going negative.
The average inflation for the last ten years was 1.69%.
That's what my TIPS bonds did for that period of time.
Pretty much net zero on those.
My CD's beat the 1.69% inflation rate easily.
Not as good as it did the 20 years previous to 2008.
But then, the decline in CD interest rates was always lagging the inflation rate decline.
So, it was kind of hard to lose purchasing power during that time period.
Now we're in a rising interest rate environment.
The good news is that in 2018, interest rates rose faster that the inflation rate.
The current inflation rate is 2.2%.
You can beat that with a 3 month CD or Treasury.

Here's the deal.
Back in 2009 there were 8 straight month's of deflation.
The average for the year was -0.4%.
Before that, the last time there was negative inflation for the year was 1955.
You do remember that, right?
The time before that was 1949.
That time was worse.
-1.2% for the year.
Remember that one?
Before that, 1939, even worse at -1.4%.
That was before my time.
So, even I don't remember that.

The good news is that the FED acted rationally and raised the interest rates today.
What happens next year depends on a lot of factors that no one knows quite yet.
Smokeboat
Smokeboat   |     |   Comment #64
The FED is always asking itself what do we do to maintain a two percent inflation rate, and act accordingly. They fear deflation more than inflation but always say they are protecting the economy from inflation but just that above two percent. The dirty word to the FED is deflation, the dirty word to a banker is credit union.
#65 - This comment has been removed for violating our comment policy.
me1004
me1004   |     |   Comment #22
The people who were (and still are) playing the housing market like a Ponzi scheme, the ones who brought down the entire economy because of their irresponsibility, are the ones who got bailed out, with hundreds of thousands of dollars of their housing loans, in many cases, forgiven. Even the stock market was a responsible investment and not overvalued when the economy crashed, but stock or mutual fund investors were not bailed out, the only ones bailed out are the those in the housing market Ponzi schemes.

They were taking what was called "liar loans," they knew they were lying about their income, they weren't being duped by the banks, like all the news reporting said.

They were maxing out getting in loans where for the first five years, you pay little, just the interest somewhat, make the minimum down payment, and at the five-year mark, the big payments start, which you have no intention whatsoever to pay, you could not do so if you wanted to. And they could not pay them, so went under, but got bailed out.

They knew they could not pay those loans, the scheme was to make a minimum down payment, and get a scam loan with relatively small payments, and sell before the five years but after three years so they would not have to pay any capital gains tax on the run up in prices. And then roll that over and it again.

But if they could not sell in those two years, they went under. And when the economy went sour, they could not sell. They got bailed out, and we who were being responsible got punished. Even in the face of the government needing and wanting more spending in the economy to help pump it, they pulled all the spending ability out form under the responsible people, who now had just about no return on their money. And even talked of negative interest rates!

I have said many times over the years, any Fed rate below 2% will do nothing at all to get spending going, as if you don't take the loan at a Fed rate of 2%, you are not going to take it at anything less, the price of the loan is not the problem. Notice, the money people out there have not been bothered by the Fed rate going up -- until now when it finally got to the 2% mark. Only now will more rate hikes do anything to pinch the economy, which is what would be needed to keep the economy from overheating again.

They never should have taken the Fed rate below 2% for very long, all they accomplished was to make it so the only people solid enough to spend because they stayed is responsible investments no longer had any income from their savings to allow them to spend, which only made the recession even worse and extremely long lasting.

The government says people need to be saving a lot more, but they constantly push them to max out their borrowing instead, and constantly punish we savers for being responsible.
larry
larry   |     |   Comment #23
Yes, I remember that and Maxine Waters U.S. Representative in CA was trying to get the government to bailout all of her constituents(which is where a bulk of the illegal action was). She also pushed for people with student loans to get bailed out. I don't know how they did it, but they managed to get it in the bailout package probably on one of those deadline deals. I know several people who had ridiculous student load debt and half of it just got wiped away with that bailout package. You had people who worked in janitorial services and living in million dollar homes, but people just turned their head. You can't just wipe away trillions in dept and then lower interest rates to zero without something bad happening. Which is what I think we will eventually see.
Att
Att   |     |   Comment #32
Many states are to blame too. They let people walkway from Mortgages. I refinanced my 30 year mortgage a while ago to a 20 year Mortgage at 3.25%. I have 13 years left on the Mortgage. I don't want to get debate about paying it off (I have my reasons not to). I did take advantage of the big drop in rates. Now enjoying the rise in rates.
deplorable 1
deplorable 1   |     |   Comment #29
I agree with you about the government bailing out the irresponsible borrowers with mortgage write downs, lower interest rates, HARP loans etc. As to the root cause I do not blame the banks though but the government for encouraging 0 down no doc loans to minorities and the poor because and i quote "Everybody deserves a house". This was started by Clinton but he passed the torch to Bush who realized too late that maybe it wasn't such a good idea after all. Maxine Waters was a big part of the problem and now she will have power again. I wonder what the next government caused crisis will be.
Frank
Frank   |     |   Comment #81
Everyone is afraid of annuities if you don't need the money short-term buying annuities you get higher rates. You don't have to take 10-year annuity you can take them from three years up the longer you take you take the better the rate
HankL
HankL   |     |   Comment #19
In consideration of today's Fed 25 basis rate hike, and their conservative remarks re possible future hikes, anybody want to comment/predict how financial institutions will react? I believe they will raise rates on liquid accounts, e.g., savings and MM accounts, increase rates on S/T CD's, and hold or lower rates on L/T CD rates. Please feel free to voice your educated opinions/predictions, including which financial institution(s) will ultimately be the rate leaders.
larry
larry   |     |   Comment #21
They'll play it close the vest is my opinion. We'll see more short term rate offers than good 60 mo. 5% offers. The good news is Powell helped out savers today by keeping future rate hikes on the table. I think we'll see some good offers, but as always it will be short, sweet and limited.
Emoticon
Emoticon   |     |   Comment #24
Locked in to Connexus 60 month certs @4% special last month. NO REGRETS
Att
Att   |     |   Comment #25
Did a large CD with Connexus @ 4%. No one can call the top to intrest rates. Great addition to my ladder. I have liquid funds from a matured Penfed CD and a muni bond that was called that was paying 5.75% which really hurt.
Daniel
Daniel   |     |   Comment #31
Where is the Connexus 4% rate shown please?
Att
Att   |     |   Comment #33
#31 The Connexus offer expired a couple of months ago.
rich
rich   |     |   Comment #67
Expired on Dec. 7th, 2018
AnnO
AnnO   |     |   Comment #76
https://www.depositaccounts.com/banks/connexus-credit-union.html#promo35737 says the Connexus 5yr (60mo) CD dropped from 4% to 3.5% on Nov 23, 2018.
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Tekka
Tekka   |     |   Comment #30
By the time we realize we are at the top of the cycle the 5 yr CD rates are likely to have fallen. A five year ladder where you fill up all the rungs and keep them filled as your CDs mature eliminates the guesswork. I held my nose and bought some 3.55% 5 yr CDs to deal with some maturing ones reminding myself that it wasn't so long ago that we were cheering for 2.20% ones. It could happen again.
Long Term
Long Term   |     |   Comment #34
$380K in 10-yr. 3.65% CD's
PabloSavin
PabloSavin   |     |   Comment #36
just bought $180 k 7 year 3.76%. have 250k coming next month going 10 yrs out on most of it.
rhrh
rhrh   |     |   Comment #40
I got a brokered fidelity cd at 4% for 10yrs on 176k last month for my ira. I figure have some of money in a sure bet while still leaving some in the markets.
Kai
Kai   |     |   Comment #56
Missed the boat on this one while I was overseas. Would love to have locked in a 4% cd for 10 years. Will keep an eagle eye out. :) Have a few CDs maturing at Penfed end of the month, hope to lock in some good long term CDs.
KRS
KRS   |     |   Comment #37
Why do you prefer CD's over AAA or AA muni bonds that offer same rates with tax free interest payments.
Att
Att   |     |   Comment #38
I like tax free muni bonds (and have 12 individual muni bonds) but their are differences. With the CD you get FDIC insurance. With some Muni bonds you private insurance and bonds are at risk of default. Also, the bond is subject to call (I just had a 5.75% bond called).
Daniel
Daniel   |     |   Comment #41
What is the best place to get the AAA or AA muni bonds and how are they traded? Insurance is definitely a big plus with CDs (set it and forget it esp for people like me who can earn the money but I don't want to watch it or agonize over it in tumultuous times).

The taxes are starting to take a bite out of the interest so I'm not against the bonds just don't know how to work with them...
KRS
KRS   |     |   Comment #53
I buy mine on the Vanguard platform.
Att
Att   |     |   Comment #63
If you have a brokerage account you should be able to buy munis. The rates aren't that great right now. Do some reading on bonds.
Think about it
Think about it   |     |   Comment #71
Why do I prefer bank accounts to muni bonds? Cities have defaulted on muni bonds leaving the bondholders in financial ruin. This is very likely to happen again. Look at the financial health of the entity behind muni bonds and you may see a black hole instead of a black ledger sheet.
Ajc123
Ajc123   |     |   Comment #39
Greetings gentlemen. I am a young Gen X investor. I am a saver. I take the Peter schiff view of our economy. The rest of the world has caught up to the American manufacturing abilities and those jobs and employees in low skill areas are in serious trouble. Wall St is a giant fake bubble that is propping up American wealth, I refuse to invest there as it is entirely speculation where the insiders get special deals and treatment and all others are left holding the bag. Stock valuations are based on analysts throwing darts at a board. I would be surprised if trump doesn't fire Powell and demand the same low rates Obama enjoyed. Get the rates while you can, fake stock market and pension wealth is what the majority of Americans rely on now, they got in bed with Wall St and they have to keep the ponzi scheme going or else they'll be retiring in a cardboard box. Millennials appear to be more frugal like their great grandparents the greatest generation who grew up saving in the shadow ww1 and the great depression.
deplorable 1
deplorable 1   |     |   Comment #42
I suggest you look into monthly paying dividend stocks. This method of investing is much less speculative and you don't need to sell at a loss to collect the monthly payout when the market drops.
#45 - This comment has been removed for violating our comment policy.
no laffn matr
no laffn matr   |     |   Comment #46
that aint gonna work man
deplorable 1
deplorable 1   |     |   Comment #50
Now where did I put that troll delete button. Oh here it is right next to my crystal ball which tells me you two are still living in mom's basement.
temperamental
temperamental   |     |   Comment #55
#50 collusion.ist..
who said #46 was responding to YOUR post .
Old As Dirt
Old As Dirt   |     |   Comment #51
Is your comment about yourself?
I really don't agree with 99% of what deplorable 1 states.
But, at least he's civil.
I mean, really?
What contribution does your comment make to anything?
I grew up with people like you.
And thankfully, have left them far behind.
Ernie
Ernie   |     |   Comment #54
That can work, but it takes a lot of homework to find the right stocks, and one needs to diversify because many dividend payers eventually fall by the wayside (GE is a recent example). There are mutual and index funds specializing in regular dividend payers but by they all have expense loads that can subtantially reduce returns. The dividend stock strategy works best if you will have sufficient total income to live on and will not need to draw down principal, which somehow always seems to happen just when stock market prices are depressed. During a major bear market, which can take several years to run its course, you may get the dividends but they may not make up for loss of principal.
deplorable 1
deplorable 1   |     |   Comment #58
The current stock market is a perfect example of using a high yield monthly dividend investing strategy. Am I selling at a loss or panicking because share prices just dropped? Nope I have choices. I can 1. Do nothing and take out my dividends and put them in a 2.5% savings account(without selling any shares) or 2. Use them to dollar cost average down at low prices and increase the dividend yield or 3. Split the difference. Now conversely say you invest in a stock that pays no dividends and it tanks you also have 2 choices 1. Hope and pray it goes back up or 2. Sell at a loss. Now I ask you which strategy sounds better?
Brokered
Brokered   |     |   Comment #59
#58
Why not post this stuff on a stock forum? This is a place for deposit accounts, hence the name.
deplorable 1
deplorable 1   |     |   Comment #60
Many people on here are also investors. This strategy also involves using savings accounts and or short term CD's to hold the dividends during turbulent markets. I thought it might be useful to illustrate how this works during a market downturn.
sandboox sam
sandboox sam   |     |   Comment #61
Deplorable, you should be writing books and talking with Powell.

People hear simply don;t understand!
Brokered
Brokered   |     |   Comment #62
#60
Many of his strategies are extremely basic and well known. Reinvest dividends? Nothing new here. Buy shares at a LOWER price? Why didn't I think of that. I read a lot of nonsense here that requires far too much involvement. How many banks do people on this site deal with...for some it sounds like dozens. Open, transfer funds, close, transfer funds and so on is nothing but a nightmare of time and often wasted energy. But, it sounds good. As GE has demonstrated time and again, even 119 year old dividends are not sacrosanct. CD's, like sleeping peacefully, are boring. I like it that way.
deplorable 1
deplorable 1   |     |   Comment #43
It looks like the markets think that Powell is much more of a inflation hawk than previously thought. I think he wants to get ahead of inflation rather than be behind the curve. Powell could actually do a .10% rate hike 8 times a year rather than .25% every other meeting. Maybe smaller hikes would calm the market.
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Old As Dirt
Old As Dirt   |     |   Comment #57
Except for the Wilshire 5000 all of the US market indexes are pretty deceptive.
Since it wasn't created until the 1970's, it lacks a long historical perspective.
However, it doesn't drop stops unless they are delisted or stop trading for three months.

They're basically rigged to only include the best performing companies.
The DOW is the biggest joke of them all because its price-weighted.
Also, it gets to dump its losers. So, from a historical perspective, its a bit of a joke.

Even though the S&P 500 uses market capitalization, isn't much better.
One of the criteria is four straight quarters of positive as-reported earnings.
If this isn't selection bias, I don't know what is!
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JamieResearch
JamieResearch   |     |   Comment #68
Sorry, ignore my comment. Couldn't figure out how to delete it. :)
Little Dog
Little Dog   |     |   Comment #72
what do you guys think of a 3.00% APY CD for 18 months at an FDIC and DIF insured bank?
AnnO
AnnO   |     |   Comment #77
If you're asking for opinions on a specific offering, say which bank you're talking about.
Cynthia maloney
Cynthia maloney   |     |   Comment #74
Change money markey rates to 4percent.
gregk
gregk   |     |   Comment #75
All for it, but as yet no FI is willing, - and why would they be? MM rates typically follow the Federal Funds rate quite closely and we're nowhere near that level (which won't happen in the current cycle).
You can dream.
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Fed Holds Rates Steady - Deposit Rate Predictions for 2018

As expected, no policy changes were announced today at the end of the two-day FOMC meeting. The Fed decided to hold off on a rate hike, but slight changes in the FOMC statement point to a higher chance of two more rate hikes this year (which will likely come in September and December). For example, the Fed’s description of the economy went from “solid” to “strong”:

June FOMC statement:

Today’s FOMC statement:

Also, the Fed’s description of household spending went from “picked up” to “grown strongly”:

June FOMC statement:

Today’s FOMC statement:

September Fed...

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Second Fed Rate Hike of 2018: Deposit Rate Predictions and Strategies

The Fed moved as expected by raising the federal funds rate by 25 basis points. This is the second Fed rate hike of 2018 and the seventh rate hike since the Fed started to raise rates in December 2015. Here’s that all important paragraph in today’s FOMC statement:

Just like in March, today’s decision was unanimous with all FOMC participants voting in favor of the rate hike.

In addition to announcing the rate hike, the FOMC statement described the state of the economy and the changes since the last...

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Fed Holds Rates Steady - Deposit Rate Predictions and Strategies

As expected, no policy changes were announced today at the end of the two-day FOMC meeting. The Fed decided to hold off on a rate hike, but a rate hike in June still looks very likely. The language in the FOMC statement describing the economy supports the continuation of the Fed’s gradual rate hikes. A few small changes in the statement language may be seen as increasing the odds of four rate hikes in 2018 (instead of just three). One is the change in the description of inflation:

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