The Federal Reserve will almost certainly decide to maintain its benchmark interest rate within the current range of 4.25% to 4.50%. This decision is expected at their December meeting. That rate has stayed steady since December 2022, a period of relative calm in the face of stormy economic seas. New signals from influential operatives suggest that attitudes may be changing within the policy-making entity.
Christopher Waller, a member of the Federal Reserve’s Board of Governors, is hoping for a cut. He indicated that he may not support the move to pause on raising rates. In a related vein, like Michelle Bowman, she indicated that in the event inflation stays low, she would fight for rate cuts. This feeling, in turn, opens the door to possible opposition from the governors — a situation that has not materialized since 1993.
Today’s credit card annual percentage rates (APRs) have jumped to 20.13%. That’s a huge jump from 16.34% in March of 2022. They’ve been able to raise savings account yields in a positive margin. As of July 21, they now sit at 0.38%, a huge leap from only 0.06% last year. The interest rate—the annual percentage yield—on a five-year CD is currently 1.7%. This is a huge jump from only 0.5% in March 2022.
Former President Donald Trump has publicly urged the Federal Reserve to initiate rate cuts, reflecting the ongoing debate about monetary policy and its impact on the economy. The Federal Deposit Insurance Corporation (FDIC) provides data on savings account yields, while Haver offers insights into certificate of deposit yields. Bankrate is the original publisher of the credit card APR daily index.
As the Federal Reserve nears their next meeting, traders and analysts will be listening intently to what’s being said amongst board members. Even that threat of dissent might be enough to herald a change in the monetary policy direction, which could impact market behaviors in a big way.