May 8, 2004

70s THINK:

A little interest boost (Robert Novak, May 8, 2004, Townhall)

The Bush administration has been alerted that Chairman Alan Greenspan will guide the Federal Reserve Board to a small interest rate boost before the presidential election, and President Bush is reported to be satisfied.

According to these sources, the central bank this fall will raise the federal funds (interbank lending) rate from the current historic low of 1 percent up to 1.25 percent. The Fed is expected to push the rate to 1.5 percent later this year after the election and up to 2 percent early next year.

Posted by Orrin Judd at May 8, 2004 7:48 AM
Comments

If only my "interest bearing checking account" would pay the 1.5% when I first got it ten years ago, and not the 0.1% it does today...

Posted by: Raoul Ortega at May 8, 2004 11:36 AM

Raoul - banks set the deposit rates based upon the fed funds rate. There is normally no need for a bank to pay more than fed funds on deposits. If I remember correctly Fed Funds didn't get below 3% 10 years ago. As the Fed raises rates and banks need to start competing for deposits the deposits rates will come up. That said you'll neve be able to retire on the interest you earn from a bank.

Posted by: AWW at May 8, 2004 3:45 PM

There's no reason for the President to be concerned that Alan Greenspan recognizes the economy is growing robustly.

Posted by: jsmith at May 9, 2004 8:03 AM
« CALIFORNIA HERE WE COME: | Main | WOLF!, PART XII (via Kevin Whited): »