The Federal Reserve has kept interest rates low for more than a year, and new policy may keep it that way for the foreseeable future too, it said in a policy statement on Thursday.
Interest rates have remained quite low in recent months. Nearly a year ago, the Federal Reserve cut interest rates to less than 2%, then again earlier this year to around 1% and then, at the start of the pandemic, interest rates were between 0% and 0.25%. Low interest rates can be good for consumers, who may indirectly benefit with slightly lower rates for credit card debt and mortgages — but it could also adversely affect retirement savings, as the growth of certain investments will be stunted.
The problem: The closer someone gets to retirement, the more likely their portfolios are to represent conservative investments, such as bonds. These “safe assets,” in response, will see a reduction in returns, said Eric Walters, managing partner and founder of Summit Hill Wealth. “As a result, they need to review their plans for retirement using lower return assumptions,” he said.
JCuff10 The Fed has devastated the plans of retirees on fixed incomes who don't want to go near the stock & bond markets!
It means kaboom! Save this instead. cantprintthis
Not good!
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Fed: Rates to stay ultra-low even after inflation picks up\n\nWASHINGTON (AP) — The Federal Reserve announced a significant change Thursday in how it manages interest rates by saying it plans to keep rates near zero even after inflation has exceeded its 2%... That’s because the size of our debt is so large any increase in the interest would make paying our debt an impossibility. Our nations financial house of cards is not sustainable. Unemployment is good for the stock market! “The economy is always evolving.” Fed Chairman Jerome Powell ' Me: So is Central Banker 👇
Source: AP - 🏆 728. / 51 Read more »
Fed plans to keep interest rates low, even if inflation rises: Who stands to benefit?In a change, the Federal Reserve says it plans to keep interest rates near zero even when the annual inflation rate exceeds its 2% target level. Rich folks with assets. Trump and large scale developers with lots of outstanding debt. New home buyers, NOT SENIORS or anyone retired or near retirement. Not my savings account.
Source: latimes - 🏆 11. / 82 Read more »
Treasury yields tick higher as markets digest Fed's 'robust' policy changeU.S. government debt prices slipped after Federal Reserve Chairman Jerome Powell said Friday that the central bank was willing to allow inflation to run hotter than normal. Long-term bonds have strong momentum, recently broke below 50day trend, could be coiling and forming a vol contraction pattern which could pop up or down, or could be another uptrend bounce. Hard to tell, I'll wait for high volume moves. I don't know where these market successes coming from. nothing is solid.
Source: CNBC - 🏆 12. / 72 Read more »