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U.S. interest rates have soared everywhere but savings accounts

bloomberg.com

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Re: U.S. interest rates have soared everywhere but savings accounts

#71

Post by pdog »

azth wrote: post #40

Serious question: inflation seems to only be getting higher (is it 8%+ now?) the Fed's increasing of the interest rate is causing a stock market crash. So if one puts their money into assets, those are decreasing in price due to the fed, and if someone is holding cash that's also going down in value due to inflation. What's the solution?

If you have inflation, something is going up in dollar terms. The answer is "real" assets: physical assets that have an intrinsic worth due to their substance and properties. Real estate, infrastructure, and commodities are all examples.

Re: U.S. interest rates have soared everywhere but savings accounts

#72

Post by Raidion »

kobalsky wrote: post #62
azth wrote: post #40

Serious question: inflation seems to only be getting higher (is it 8%+ now?) the Fed's increasing of the interest rate is causing a stock market crash. So if one puts their money into assets, those are decreasing in price due to the fed, and if someone is holding cash that's also going down in value due to inflation. What's the solution?

Bumping because I'm really interested in this answer. For me the obvious answer is, if the fed actions means it's more expensive to borrow now, then lend your money. The question is how and where. Bonds? Which bonds? TIPS don't seem to have a rate that would protect me from inflation. Gold? There's enough volatility there to lose more than 2 years worth of inflation with a badly timed entry, and I if I have to time m…

Aren't stable coins pegged to USD subject to the same inflationary concerns as USD and counterparty risk? You're getting a few extra % return, but aren't the risk adjusted returns the same?

I honestly have the same questions as you though, I feel like if I was 100% sure of big inflation coming, all I'd know I want to do is get out of cash, but I don't know where to put my money. Part of me says Walmart, Dollar stores, and other inelastic merchants, but idk. Physical gold seems ok, but you're right in that if you overpay, you're overpaying for an asset that doesn't return anything.

Re: U.S. interest rates have soared everywhere but savings accounts

#74

Post by JumpCrisscross »

kobalsky wrote: post #62
azth wrote: post #40

Serious question: inflation seems to only be getting higher (is it 8%+ now?) the Fed's increasing of the interest rate is causing a stock market crash. So if one puts their money into assets, those are decreasing in price due to the fed, and if someone is holding cash that's also going down in value due to inflation. What's the solution?

Bumping because I'm really interested in this answer. For me the obvious answer is, if the fed actions means it's more expensive to borrow now, then lend your money. The question is how and where. Bonds? Which bonds? TIPS don't seem to have a rate that would protect me from inflation. Gold? There's enough volatility there to lose more than 2 years worth of inflation with a badly timed entry, and I if I have to time m…

> TIPS don't seem to have a rate that would protect me from inflation

The TIP yield is a real yield. It's indexed to CPI-U, same as Series I bonds. (TIPs adjust monthly; Series I bonds semiannually.)

> would convert a some portion of my savings into stablecoins

This is probably the worst choice one can make. It's accepting a 0% nominal yield against an unregulated counterparty. A Bank of America savings account is literally a better choice.

Re: U.S. interest rates have soared everywhere but savings accounts

#75

Post by bezospen15 »

crate_barre wrote: post #55
tppiotrowski wrote: post #46

Earlier quoted context omitted.

I think rising interest rates should depress the value of housing. With a higher interest rate you can't afford as much principal so you start bidding on cheaper houses.

The monthly payment of 28%-38% of gross monthly pay is harder to get to with the rising interest rate and rising home prices. You’d be looking at over 50% of your net take home pay per month (yes, over half your months paycheck, especially in high cost of living areas). They are fucking pricing everyone out other than investors or existing home owners that can tap into home equity. And rent is nearing 1900 nationwide…

Can't keep at this pace for much longer. We'll know more in 12 months, stay liquid for now

Re: U.S. interest rates have soared everywhere but savings accounts

#76

Post by sb057 »

azth wrote: post #40

Serious question: inflation seems to only be getting higher (is it 8%+ now?) the Fed's increasing of the interest rate is causing a stock market crash. So if one puts their money into assets, those are decreasing in price due to the fed, and if someone is holding cash that's also going down in value due to inflation. What's the solution?

If the cause of inflation is the same amount of dollars bidding up a lesser quantity of goods, the only way to resolve the situation is to increase the number of goods or decrease demand for them.

Re: U.S. interest rates have soared everywhere but savings accounts

#77

Post by gdurham »

The issue is that there is no incentive for banks to increase interest rates on accounts as they are already sitting on too much cash. Banks make money by lending money out, in times where banks are strapped for cash on hand, you will see interest rates increase. I don’t see this changing in the near future.

Re: U.S. interest rates have soared everywhere but savings accounts

#78

Post by bezospen15 »

jeffbee wrote: post #54
azth wrote: post #40

Serious question: inflation seems to only be getting higher (is it 8%+ now?) the Fed's increasing of the interest rate is causing a stock market crash. So if one puts their money into assets, those are decreasing in price due to the fed, and if someone is holding cash that's also going down in value due to inflation. What's the solution?

Consensus opinion seems to be that peak annual inflation already is behind us and mostly it was spectacular because of low March 2021. If inflation increases in the remainder of 2022, all the economic forecasts, and the federal reserve policy, are totally wrong.

Powell was placed by Trump to feed the rich. It worked and now middle class will suffer

Re: U.S. interest rates have soared everywhere but savings accounts

#80

Post by JumpCrisscross »

victor106 wrote: post #79

So treasures yield 3%. Why can’t I just buy these bonds and get a 3% rate? What am I missing? https://www.cnbc.com/amp/2022/04/19/us-bonds-treasury-yields...

> Why can’t I just buy these bonds and get a 3% rate? What am I missing?

Savings accounts can be drawn with zero notice. They're essentially rolling overnight. A 10-year Treasury cannot be redeemed before 10 years. (It can be sold, though at the market's whim with respect to price.)

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