The Fed. Rasied The Inerest Rate Now What?

The Fed hiked the rate so others will be impacted like mortgage rates in credit card rates, but what about CD and saving accounts rates??

rhinefire said:

...but what about CD and saving accounts rates??

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Hopefully. Would love to see that again.

rhinefire said:

The Fed hiked the rate so others will be impacted like mortgage rates in credit card rates, but what about CD and saving accounts rates??

Click to expand...

The interest rate on savings deposits and CDs won't increase that much until commercial bank reserves begin to fall to levels that induce demand for savings. At this point, given the level of reserves in the banking system, it makes very little sense for institutions to compete for deposits. As reserve balances continue to trickle off with the maturity of the debt which is responsible for such levels, we can once again witness an environment where banks raise savings interest to attract additional reserves.

Mortgage and CC rates are determined more or less by supply and demand factors at this point.

Rates are going up - especially in mortgages - because of the bond market. Which has gone semi-nuts since Trump was elected.

If bonds keep going up - there is little the Fed can do (short of negative interest rates) to stop rates rising.

DA60 said:

Rates are going up - especially in mortgages - because of the bond market. Which has gone semi-nuts since Trump was elected.

If bonds keep going up - there is little the Fed can do (short of negative interest rates) to stop rates rising.

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the fed wants rates up to realistic or historical levels- make sense?