Interest rates/Inflation
Dear Terry,
Always respect your opinions on everything and wanted yours on this.
I realize that inflation is at its highest since the Carter Era. I recall opening a CD in 1982 and getting 17.60 %. 40 years later the inflation rate is the same and I had an IRA renewal at .10 % ! The reason was it was for only 6 months and to keep it for 2 years at .50% made no sense.
What on earth is the Fed doing to us? What is their purpose on this planet?
I remember Janet Yeltsins’ great lie ‘I’m for main street, not Wall Street’. What a crock!
I guess as long as the insiders are making their millions in the market and from donations from the banking industry they could care less about interest rates.
Remember when passbook savings had to be no less than 4.75% ?!
I’m certain that the Fed will not raise rates, blaming the Russia/Ukraine debacle. If they even do it won’t be much, just to keep us all dependent on the government.
Interested to hear your comments.
Stay safe Terry!
Kind regards,
Gary Duch
Terry Says
Whew, that was a long one! Interest rates at the short end are set by the Fed. But the market forces also play a part, especially for longer-term borrowings. When inflation is expected rates will rise.
Banks aren’t raising deposit rates now because they don’t need to attract deposits! There’s plenty of money around to fund loans. And businesses don’t seem so confident about the future, so there is less demand to borrow from banks! And that’s a key part of why rates are low. I predict they won’t stay this low for long.
