Jill Slattery is the VP of Content for the Hearst E-Commerce team. She previously served as the Chief Content Officer of Livingly Media. Email her at [email protected] Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. This may influence which products we write about and where those products appear on the site, but it does not affect our recommendations or advice, which are grounded in research.Mobile app users, click here for the best viewing experience.In a move that was widely predicted by economists, the Federal Reserve raised interest rates by 0.5 percentage points during its December 14 session, its last meeting of 2022.This marks the seventh time this year that the Fed has increased interest rates in an effort to combat rising inflation. The Federal Reserve had previously increased the target range for its benchmark interest rate by 0.75% during its last four meetings. This latest increase pushes the benchmark borrowing rates to a target range of 4.25% to 4.5%, the highest level since 2007.Ahead of the Fed’s meeting on Wednesday, the Labor Department’s latest consumer price index report indicated that inflation seems to be slowing. The consumer price index rose just 0.1% from the previous month and increased 7.1% from a year ago. Experts had been predicting increases of 0.3% and 7.3%, respectively.The FOMC policy statement, which was approved unanimously, was largely unchanged from November’s meeting. The U.S. central bank’s projection of the target federal funds rate rising to 5.1% in 2023 is slightly higher than some investors expected, but largely in line with what many experts had predicted.How does the Fed rate hike affect savings account interest rates?The Federal Reserve doesn’t directly set interest rates for savings accounts. But the Fed’s federal fund rate decisions do influence the rates that banks set for consumer products like savings accounts. And savings account interest rates are generally correlated to the federal funds rate — meaning that if one increases, the other is likely to increase as well.As of December 7, the national average interest rate for savings accounts is 0.19 percent, according to Bankrate. But many banks offer high-yield savings accounts that have much higher rates. Online high-yield savings account rates may be as high as 4% in some cases. You should always compare online banks with larger banks when assessing which institutions offer the most competitive annual percentage yield (APY) on your money.Today’s savings account interest ratesPHNwYW4+PC9zcGFuPjxzY3JpcHQgYXN5bmM9InRydWUiIHNyYz0iaHR0cHM6Ly9zdGF0aWMubXlmaW5hbmNlLmNvbS93aWRnZXQvbXlGaW5hbmNlLmpzIj48L3NjcmlwdD48ZGl2IGNsYXNzPSJteUZpbmFuY2Utd2lkZ2V0IiBkYXRhLWFkLWlkPSI5NmNjNTRkOC1hZmJmLTQzZDctYTUwZS1jN2EwZmU3YWNhN2YiIGRhdGEtY2FtcGFpZ249ImtjcmEtc2F2LW11bHRpIiBkYXRhLXN1Yi1pZD0iaHR0cDovL3d3dy5rY3JhLmNvbS9hcnRpY2xlL3B1dC15b3VyLW1vbmV5LXNhdmluZ3MtYWNjb3VudC1yaWdodC1ub3cvNDIzNjI5OTkiPjwvZGl2Pg== Are more Fed rate hikes coming in 2023?During a speech at the Brookings Institution in Washington D.C. on November 30, Federal Reserve Chair Jerome Powell signaled the Fed’s likely plans to “moderate” rate hikes.“It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” Powell said. “The time for moderating the pace of rate increases may come as soon as the December meeting.””The full effects of our rapid tightening so far are yet to be felt,” he added, indicating that though the pace of rate hikes might slow, we likely won’t see rate cuts any time soon. “I don’t want to overtighten… cutting rates is not something we want to do soon. So that’s why we’re slowing down and will try to find our way to what that right level is.”“It is likely that restoring price stability will require holding policy at a restrictive level for some time,” said Powell. “History cautions strongly against prematurely loosening policy. We will stay the course until the job is done.”So what does all of this mean? While inflation seems to be moving in the right direction, there’s still more work to do before it returns to the Fed’s goal of 2%. It’s unlikely that the Fed will cut interest rates any time soon, and the markets currently expect the federal funds rate to hold at around 5% for much of 2023 — which is all the more reason to find out whether a high-yield savings account can help you make the most of your money.PHNwYW4+PC9zcGFuPjxzY3JpcHQgYXN5bmM9InRydWUiIHNyYz0iaHR0cHM6Ly9zdGF0aWMubXlmaW5hbmNlLmNvbS93aWRnZXQvbXlGaW5hbmNlLmpzIj48L3NjcmlwdD48ZGl2IGNsYXNzPSJteUZpbmFuY2Utd2lkZ2V0IiBkYXRhLWFkLWlkPSI5NmNjNTRkOC1hZmJmLTQzZDctYTUwZS1jN2EwZmU3YWNhN2YiIGRhdGEtY2FtcGFpZ249ImtjcmEtc2F2LW11bHRpIiBkYXRhLXN1Yi1pZD0iaHR0cDovL3d3dy5rY3JhLmNvbS9hcnRpY2xlL3B1dC15b3VyLW1vbmV5LXNhdmluZ3MtYWNjb3VudC1yaWdodC1ub3cvNDIzNjI5OTkiPjwvZGl2Pg==Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.This article originally appeared on SFGate.com.
Jill Slattery is the VP of Content for the Hearst E-Commerce team. She previously served as the Chief Content Officer of Livingly Media. Email her at [email protected] Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. This may influence which products we write about and where those products appear on the site, but it does not affect our recommendations or advice, which are grounded in research.
Mobile app users, click here for the best viewing experience.In a move that was widely predicted by economists, the Federal Reserve raised interest rates by 0.5 percentage points during its December 14 session, its last meeting of 2022.This marks the seventh time this year that the Fed has increased interest rates in an effort to combat rising inflation. The Federal Reserve had previously increased the target range for its benchmark interest rate by 0.75% during its last four meetings. This latest increase pushes the benchmark borrowing rates to a target range of 4.25% to 4.5%, the highest level since 2007.Ahead of the Fed’s meeting on Wednesday, the Labor Department’s latest consumer price index report indicated that inflation seems to be slowing. The consumer price index rose just 0.1% from the previous month and increased 7.1% from a year ago. Experts had been predicting increases of 0.3% and 7.3%, respectively.The FOMC policy statement, which was approved unanimously, was largely unchanged from November’s meeting. The U.S. central bank’s projection of the target federal funds rate rising to 5.1% in 2023 is slightly higher than some investors expected, but largely in line with what many experts had predicted.
How does the Fed rate hike affect savings account interest rates?
The Federal Reserve doesn’t directly set interest rates for savings accounts. But the Fed’s federal fund rate decisions do influence the rates that banks set for consumer products like savings accounts. And savings account interest rates are generally correlated to the federal funds rate — meaning that if one increases, the other is likely to increase as well.As of December 7, the national average interest rate for savings accounts is 0.19 percent, according to Bankrate. But many banks offer high-yield savings accounts that have much higher rates. Online high-yield savings account rates may be as high as 4% in some cases. You should always compare online banks with larger banks when assessing which institutions offer the most competitive annual percentage yield (APY) on your money.Today’s savings account interest ratesAre more Fed rate hikes coming in 2023?During a speech at the Brookings Institution in Washington D.C. on November 30, Federal Reserve Chair Jerome Powell signaled the Fed’s likely plans to “moderate” rate hikes.“It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” Powell said. “The time for moderating the pace of rate increases may come as soon as the December meeting.””The full effects of our rapid tightening so far are yet to be felt,” he added, indicating that though the pace of rate hikes might slow, we likely won’t see rate cuts any time soon. “I don’t want to overtighten…[but] cutting rates is not something we want to do soon. So that’s why we’re slowing down and will try to find our way to what that right level is.”“It is likely that restoring price stability will require holding policy at a restrictive level for some time,” said Powell. “History cautions strongly against prematurely loosening policy. We will stay the course until the job is done.”So what does all of this mean? While inflation seems to be moving in the right direction, there’s still more work to do before it returns to the Fed’s goal of 2%. It’s unlikely that the Fed will cut interest rates any time soon, and the markets currently expect the federal funds rate to hold at around 5% for much of 2023 — which is all the more reason to find out whether a high-yield savings account can help you make the most of your money.Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.This article originally appeared on SFGate.com.
https://news.google.com/__i/rss/rd/articles/CBMiTmh0dHBzOi8vd3d3LmtjcmEuY29tL2FydGljbGUvcHV0LXlvdXItbW9uZXktc2F2aW5ncy1hY2NvdW50LXJpZ2h0LW5vdy80MjM2Mjk5OdIBUmh0dHBzOi8vd3d3LmtjcmEuY29tL2FtcC9hcnRpY2xlL3B1dC15b3VyLW1vbmV5LXNhdmluZ3MtYWNjb3VudC1yaWdodC1ub3cvNDIzNjI5OTk?oc=5