Yahoo Finance Federal Reserve pushes interest rates above 5% for first time since 2007

mathjak107 said:
no , what i do do. is try to correct the myth and bull that gets spewed here based on facts figures and actual data .

something that seems quite foreign to some here as they shoot from the hip with their bull and what they think as opposed to what facts tells us then they argue it to boot instead of learning from it.

i challenge you to find any support for your claim that americans are ahead because rates are higher on their tiny bank accounts. vs what inflation has done driving up their expenses
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No that is not what you do.....self awareness goes a long way.
So, lets take 'your' numbers.
"The average American savings account balance is $4,500.", thats because many people don't keep a lot of money in a 'savings account'. I have $67 in my savings account, but have a million in liquid investments. So to point to savings accounts is the wrong metrics.

Thats just one metric.....You are good at one thing I can give you credit for. You are the king/or queen of 'Cut & Paste'.
Maybe I wasn't clear enough....you don't have to demean people in your responses. The point was some folks from NY are 'pointed' and rude in their dialog with people.
Just because you can cut & paste from random google searches doesn't mane the sources are accurate, and it surely doesn't indicate you are well versed in finances.
 

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Sippican said:
So I am wrong that you treat people poorly and that it reflects on you more than what you are trying to say?
No, I think I'm right.....others agree.
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It's hard to have a discussion with a poster that thinks they know everything (they do not) and they want to change the subject and go and on about how much they think they know.

This thread was about CD's and how 5% is a good rate.
 
oldmontana said:
It's hard to have a discussion with a poster that thinks they know everything (they do not) and they want to change the subject and go and on about how much they think they know.

This thread was about CD's and how 5% is a good rate.
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learn the facts and we can have a discussion…
 

Sippican said:
No that is not what you do.....self awareness goes a long way.
So, lets take 'your' numbers.
"The average American savings account balance is $4,500.", thats because many people don't keep a lot of money in a 'savings account'. I have $67 in my savings account, but have a million in liquid investments. So to point to savings accounts is the wrong metrics.

Thats just one metric.....You are good at one thing I can give you credit for. You are the king/or queen of 'Cut & Paste'.
Maybe I wasn't clear enough....you don't have to demean people in your responses. The point was some folks from NY are 'pointed' and rude in their dialog with people.
Just because you can cut & paste from random google searches doesn't mane the sources are accurate, and it surely doesn't indicate you are well versed in finances.
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Sippican said:
No that is not what you do.....self awareness goes a long way.
So, lets take 'your' numbers.
"The average American savings account balance is $4,500.", thats because many people don't keep a lot of money in a 'savings account'. I have $67 in my savings account, but have a million in liquid investments. So to point to savings accounts is the wrong metrics.

Thats just one metric.....You are good at one thing I can give you credit for. You are the king/or queen of 'Cut & Paste'.
Maybe I wasn't clear enough....you don't have to demean people in your responses. The point was some folks from NY are 'pointed' and rude in their dialog with people.
Just because you can cut & paste from random google searches doesn't mane the sources are accurate, and it surely doesn't indicate you are well versed in finances.
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prove me wrong .

go find a credible source that shows that americans are better off now with higher inflation and 5% cds vs lower rates and lower inflation

i will wait
 
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mathjak107 said:
  • Between 1959-2022, the average U.S. savings rate has been 8.96%.
  • The average household savings rate in the U.S. was only 5.1% in the second half of 2022.
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Although I'm no expert my feeling is that it was right of the Fed to increase the rate again. And I concur that 4% bond rate with a high inflation rate is worse than a low bond rate with low inflation, except, people lucky enough to have gotten a 10 year bond at 4% will be benefiting once inflation is back under control. Unfortunately I didn't have money to buy 10 yr bonds at good rates because I'm trying to pay off the pesky high-interest-rate mortgage I got at the end of last year.

I found a graph of the savings rates over time. The big spike upward in savings three years ago is interesting, it literally reflects my own life, in 2020 my retirement was looming in the near future and I was saving as much as I could, while simultaneously having smaller expenses due to the pandemic. And then the big drop in savings last year also reflects my own life, because I retired last year and switched from saving to spending.

I think the data would be more interesting if it was by age range because I'm not sure how much of the drop in savings is due to baby boomers retiring (ceasing to save). Most likely young people save until they have young children, then can't save much until the kids are old enough to be in school, then presumably the family saves again until the kids are in college and during that period presumably there is no money to save. And after the kids finish college the family can save until retirement, then they stop saving. So, if we have a population bulge simultaneously in the young-family and retirement-age generations, that could explain a lower overall saving rate compared to if the population bulges were in the kids-in-school and pre-retirement generations.

savings rates over time.jpg
 
i agree the fed needed to raise rates ….but there is pain that goes with that and it effects all of us .

if we head towards a recession 5% cds are not going to be so great when for every point rates fall a long term treasury bond or etf gains 22%

so while THERE is a place for cash it is a poor investment over time and it really shouldn’t be someone’s INVESTMENT..

I have quite a bit in cash instruments since the portfolio i use as a core forms a barbell with long. term treasuries on one side and cash instruments and short term bonds on the other .

but if rates fall it means we are headed for recession and once again those rates on cash will be peeing in the ocean compared to what might happen to equities and high yield in a recession .

so the point is nothing sits alone in isolation..assets , the economic cycles and greed and fear all determine our outcome so raving about one small asset class getting 5% when everything else is falling isn’t a good thing and or our cost of living is soaring

better we should have prosperity , low inflation and lower rates
 
mathjak107 said:
i agree the fed needed to raise rates ….but there is pain that goes with that and it effects all of us .

if we head towards a recession 5% cds are not going to be so great when for every point rates fall a long term treasury bond or etf gains 22%

so while THERE is a place for cash it is a poor investment over time and it really shouldn’t be someone’s INVESTMENT..

I have quite a bit in cash instruments since the portfolio i use as a core forms a barbell with long. term treasuries on one side and cash instruments and short term bonds on the other .

but if rates fall it means we are headed for recession and once again those rates on cash will be peeing in the ocean compared to what might happen to equities and high yield in a recession .

so the point is nothing sits alone in isolation..assets , the economic cycles and greed and fear all determine our outcome so raving about one small asset class getting 5% when everything else is falling isn’t a good thing and or our cost of living is soaring

better we should have prosperity , low inflation and lower rates
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"but if rates fall it means we are headed for recession and once again those rates on cash will be peeing in the ocean compared to what might happen to equities and high yield in a recession ."

So you try to time the bottom and the top of the markets?
If you do know about various options for cash, you know that fixed annuities can work like CD's only lock in the rate for many years.
5.60% for 7 years, paying interest monthly.....for 7 YEARS. regardless of the interest fluctuation.
Please, try to have a normal person dialog.....
 
mathjak107 said:
prove me wrong .

go find a credible source that shows that americans are better off now with higher inflation and 5% cds vs lower rates and lower infalation

i will wait
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Sippican said:
See, now there is the problem.....you think your opinion is the only view to have.
Its hard to have a discussion when all you do is name calling and attack people. Proves you are not open for a real discussion due to your insecurities.
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You nailed it.

I started this thread to discuss the fact that CD's are at 5%. A good place to put cash. But thanks to one poster that has tried to take over this thread it's become anything but that.
 
Sippican said:
"but if rates fall it means we are headed for recession and once again those rates on cash will be peeing in the ocean compared to what might happen to equities and high yield in a recession ."

So you try to time the bottom and the top of the markets?
If you do know about various options for cash, you know that fixed annuities can work like CD's only lock in the rate for many years.
5.60% for 7 years, paying interest monthly.....for 7 YEARS. regardless of the interest fluctuation.
Please, try to have a normal person dialog.....
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nope i never time markets

i use a diversified portfolio that can hold its own in good or bad times ….. it has components for dealing with

prosperity

recession

depression

and high inflation / weak dollar …

i have no clue what is coming next nor do i try ….nor do i need to .

on the other hand the business cycle is alive and well and we have only delayed it from its cycle .
but all that has nothing to do with the facts that MOST AMERICANS WERE BETTER OFF WITH LOW INFLATION AND LOWER RATES

5% cds don’t make up for the hit in most assets and the rise in most if not all our cost of kiving expenses…

if anyone here thinks they are better off now because of higher rates on savings then they are the exceptions.

like i said most americans have little savings to even get interest on …
 
oldmontana said:
You nailed it.

I started this thread to discuss the fact that CD's are at 5%. A good place to put cash. But thanks to one poster that has tried to take over this thread it's become anything but that.
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and i said the fact cds are at 5% is not a good thing for most americans

most of us were better off with lower rates and lower inflation ….
 
Today‘s interest rates are about what they were throughout most of my adult life. I remember using 5% as an estimate of what I would earn on savings when I did my financial planning. The very low interest rates we have had for over a decade are not norma, in my experience. .

for long term inflation protection I use a common stock index fund. A descent alternative would be IBonds but the purchase limit makes that hard to do.
 
oldmontana said:
There you go again. You post your opinion as fact.
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then prove me wrong .

that is fact not opinion .

show me one accredited study that shows americans are helped more by 5% cds or 5% saving account rates then lower inflation and lower interest rates

stop saying it’s my opinion until you can prove my data and facts wrong
 
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Brookswood said:
Today‘s interest rates are about what they were throughout most of my adult life. I remember using 5% as an estimate of what I would earn on savings when I did my financial planning. The very low interest rates we have had for over a decade are not norma, in my experience. .
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and average historical inflation was 3% or so over most of my life not 5-9% if you want to go by history.

so yeah , historically 5% interest and 3-4% inflation is decent and a good match.

from 1960 to 2021, the average inflation rate was 3.8% per year.
 
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mathjak107 said:
then prove me wrong .

that is fact not opinion .

show me one accredited study that shows americans are helped more by 5% cds or rates then lower inflation and lower interest rates

stop saying it’s my opinion until you can prove my data and facts wrong
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You stated as fact..."and i said the fact cds are at 5% is not a good thing for most americans" Yoiur opinion and not a fact.

If it's a fact prove it. It's up to you...I will await your post.

Thanks!
 
oldmontana said:
You stated as fact..."and i said the fact cds are at 5% is not a good thing for most americans" Yoiur opinion and not a fact.

If it's a fact prove it. It's up to you...I will await your post.

Thanks!
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i already presented to you why 5% on cds is irrelevant to most of america since they lack savings to get it on and are hit harder by higher inflation and higher debt rates , above .

go read. it if you didn’t …

now it’s your turn to prove me wrong
 
mathjak107 said:
i already presented to you why 5% on cds is irrelevant to most of america since they lack savings to get it on and are hit harder by higher inflation and higher debt rates , above .

go read. it if you didn’t …

now it’s your turn to prove me wrong
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That is not a fact. You are stating what you think (opinion) which is OK but you could not back it up with a reliable source.

FYI I do not have to prove you wrong that is not the way it works. it's up to you to back up what you post. I think you will agree on that.
 
for those interested in learning more :

keep in mind that just to be able to have a 4% safe withdrawal rate hold it takes a minimum of 2% real returns , that is inflation adjusted returns , as an average over the first 15 years of a 30 year retirement …

those who retired in 1965/1966 had decent interest rates on cash …however since rates and inflation are joined at the hip they are the worst case outcomes where 4% inflation adjusted draws failed .

In the years after 1965, the perfect storm of retirement killing conditions took place.

Inflation grew rapidly over the following decade, exceeding 10% in several years in the 1970’s and averaging 6% a year from 1965 to 1985.

Interest rates rose rapidly, from ~4% in 1965 to ~8% in 1970, up to 15% in 1982

The combo of fast rising high inflation and rising interest rates destroyed bonds and wiped out cash instrument returns .


Stocks also performed horribly. Adjusted for inflation, the stock market didn’t rise above its 1965 value until 1983 , 18 years later.


The most insidious killer was inflation.

Retirees were pulling out way more dollars to live then they ever imagined .

By the time The smoke cleared the fact the greatest bull market in history was in their time frame did not help as they already spent down to far for markets to help

Few even gave it a thought prior since inflation was low and not even on the radar.

so when drawing out money it matters what your inflation adjusted returns are not just nominal returns
 
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for those who have interest in this stuff here is some more interesting data from famous researcher michael kitces …

we have had a few times in history where 4% safe withdraw rates actually failed to hold .

those retiring on the eve of 1907 , 1929 ,1937 ,1965 and 1966 would have run out of money before they ran out of time drawing a mere 4% inflation adjusted using at least 40% equities ..

they would have run out of money using fixed income only and no equities 65% of the 122 rolling 30 year cycles to date actually making a 4% inflation adjusted draw rate unsafe with just fixed income .

so looking at the results for those failed time frames show the results over 30 years really wasn’t bad …in fact the failed periods looked pretty normal .

30 year outcomes , are fairly decent

1907 stocks returned 7.77% -- bonds 4.250-- rebalanced portfolio 7.02- - inflation 1.64--

1929 stocks 8.19% - - bonds 1.74%-- rebalanced portfolio 6.28-- inflation 1.69--

1937 stocks 10.12 - - bonds 2.13 - rebalanced portfolio -- 7.24 inflation-- 2.82

1966 stocks 10.23 - -bonds 7.85 -- rebalanced portfolio 9.56- - inflation 5.38

for comparison the 140 year average's were: stocks 8.39--bonds 2.85%--rebalanced portfolio 6.17% inflation 2.23%

however it was the first 15 years that did them in

so lets look at the first 15 years in those time frames determined to be the worst we ever had.
..

1907--- stocks minus 1.47%---- bonds minus .39%-- rebalanced minus .70% ---inflation 1.64%
.

1929---stocks 1.07%---bonds 1.79%---rebalanced 2.29%--inflation 1.69%
.

1937---stocks -- 3.45%---bonds minus 3.07%-- rebalanced 1.23%--inflation 2.82%
.

1966-stocks minus .13%--bonds 1.08%--rebalanced .64%-- inflation 5.38% it is those 15 year horrible time frames that the 4% safe withdrawal rate was born from .

so need a minimum of a 2% real return the first 15 years as an average or we would have to take a pay cut from even 4% .

going from 4% to 3% draws is a 25% pay cut …anyone want a 25% pay cut when working ?

well i doubt most of us want one in retirement
 
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mathjak107 said:
then prove me wrong .

that is fact not opinion .

show me one accredited study that shows americans are helped more by 5% cds or 5% saving account rates then lower inflation and lower interest rates

stop saying it’s my opinion until you can prove my data and facts wrong
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Because your 'fact' is nothing more than a 'Cut & Paste' from whatever website you find to support your opinion. I can find web sites to support mine. That doesn't make either opinion more valid.
I take your 'findings' word for word, and plug them into Google and see exactly where you got your information from, and they are not creditable sites in most cases. So don't act like you are this enlightened investor, when its all about 'cut & pasting'.

Why are you stuck on CD's? You talk like the current financial situation is affecting all of us. Its not. Just on your home interest rates. You act like it affects most Americans, it doesn't. Most are still benefiting from low, locked in interest rates.

We don't have to prove you wrong. We just have to do our on investigations and find how shallow your views are.
 

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