Savings Rates May Stop Dropping?
This week the Federal Reserve, after their FOMC meeting, announced that they would be raising the federal funds target rate from a 0.00%-0.25% to 0.25%, which essentially raising the federal funds rate. IAt a time when interest rates have been falling very very quickly, with some banks seeing their rates fall several times last month, this cold be a sign that interest rates will slow their fall. While I still reiterate the recommendation that you try to lock in rates with CDs, this is certainly a good sign for savers out there looking to get something for their good behavior.
In other Fed related news, the FOMC also said they’d be buying $750 billion more agency mortgage-backed securities, which would bring the total purchases up to $1.25 trillion. It would also buy up $300 billion in longer-term Treasuries to help credit markets and expand the TALF (Term Asset Backed SEcurities Loan Facility) to include other assets.