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...inequality increasing savings and lower productivity and growth rates reducing the desire for investment....
...The flipside to higher interest rates is people also want more for their savings....
...But banks are finally having to pass on higher savings rates to depositors, according to JPMorgan and Wells Fargo, which also reported earnings....
...You see the same thing when you look at savings — the amount of money people have in checking and savings accounts across the income distribution. Look at people who make less than $25,000 a year....
...Banks are unlikely to offer the same high yield on their savings accounts due to costs of intermediation. Direct debt sales to retail investors will therefore suck out funds from bank accounts....
...From the bank: When can we expect sagging S&L tax revenues to moderate consumption and gross investment growth?...
...Growth and employment remain strong — so strong, in fact, that expectations for Federal Reserve interest rate cuts are being pushed further into the future....
...It is increasingly infiltrating the likes of the Federal Reserve Board, the European Central Bank and the Bank of England. And it is one of the few acronyms for which economists deserve forgiveness....
...England, European Central Bank and the Federal Reserve....
...Here he makes the case that the stock prices in the failure of the bank’s recently announced strategic revamp: Investors value banks on price-to-book value ratios with reference to the return on equity...
...Last year the SNB was forced to play a key role in saving Credit Suisse, Switzerland’s second-largest bank, and orchestrating its emergency takeover by rival UBS....
...banks....
...Banks that failed to keep up have been left exposed. Between spring 2022 and 2023, the US federal funds effective rate soared from almost zero to more than 5 per cent....
...First, the rise of fixed-rate loans — and pandemic savings — have stunted the impact of rate rises....
...The central bank has held rates steady since July....
...Nearly 10 per cent of this balance was in serious delinquency (defined as 90 days or more late), according to the Federal Reserve Bank of New York....
...As you can see at right, bank credit is still restricted, but spreads don’t care....
...Jay Powell’s Federal Reserve dithered on raising interest rates until it had no choice but to act....
...They have been able to charge more for loans because of the interest rates being increased by the Federal Reserve, but they haven’t been passing on these higher savings rates to depositors at the same rate...
...Credit card delinquencies by consumers at large US banks have risen to their highest level since before the Covid-19 pandemic, underscoring the impact from rising interest rates and lower household savings...
...The investment bank’s Marcus saving accounts are still around despite the general unwind of Goldman’s retail thrust. They pay interest at an annual rate of 4.50 per cent....
...In response, the central bank announced yesterday that it would do nothing....
...He has been a Federal Reserve economist, a consultant to governments and to the IMF, a fellow at Brookings, and a member of the monetary policy committee of the Bank of England....
...The Consumer Financial Protection Bureau is proposing to cap overdraft fees at as low as $3, potentially saving consumers billions of dollars a year and stepping up US President Joe Biden’s war on so-called...
...The broad measure of money supply known as M2, which includes cash held in money market accounts and bank deposits, as well as other forms of savings, is still well above its pre-pandemic trend....
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