UK jobs boom cools ahead of Brexit as employment falls by most in over four years

The number of people in employment unexpectedly fell by 56,000 to 32.69 million, the Office for National Statistics said. Excluding bonuses, which smooths out some volatility, pay growth slowed slightly to 3.8%, a touch ahead of the Reuters poll forecast of 3.7%. “The employment rate is still rising year-on-year, but this growth has cooled noticeably in recent months,” ONS statistician Matt Hughes said. “Among the under-25s, the employment rate has actually started to fall on the year.” The tren


The number of people in employment unexpectedly fell by 56,000 to 32.69 million, the Office for National Statistics said. Excluding bonuses, which smooths out some volatility, pay growth slowed slightly to 3.8%, a touch ahead of the Reuters poll forecast of 3.7%. “The employment rate is still rising year-on-year, but this growth has cooled noticeably in recent months,” ONS statistician Matt Hughes said. “Among the under-25s, the employment rate has actually started to fall on the year.” The tren
UK jobs boom cools ahead of Brexit as employment falls by most in over four years Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-15
Keywords: news, cnbc, companies, rose, rate, ahead, boom, pay, growth, unexpectedly, jobs, ons, employment, falls, cools, months, brexit


UK jobs boom cools ahead of Brexit as employment falls by most in over four years

Britain’s jobs boom weakened in the three months to August as the approach of Brexit led to the biggest fall in employment in over four years, data showed on Tuesday.

The number of people in employment unexpectedly fell by 56,000 to 32.69 million, the Office for National Statistics said.

Economists polled by Reuters had expected employment to grow by 23,000.

The number of people out of work rose by 22,000 to just over 1.31 million, the ONS said.

The ONS also said total earnings growth, including bonuses, rose by an annual 3.8% in the three months to August, slowing from a rise of 3.9% in the three months to July which was the strongest increase since 2008.

The rise in total pay in the June-August period was weaker than the median forecast of 4.0% in the Reuters poll.

Excluding bonuses, which smooths out some volatility, pay growth slowed slightly to 3.8%, a touch ahead of the Reuters poll forecast of 3.7%.

“The employment rate is still rising year-on-year, but this growth has cooled noticeably in recent months,” ONS statistician Matt Hughes said. “Among the under-25s, the employment rate has actually started to fall on the year.”

Britain’s economy contracted in the second quarter but appears to have grown between July and September, avoiding a recession before the country’s scheduled departure from the European Union at the end of this month.

The labor market has proven surprisingly strong since the Brexit referendum in June 2016, something many economists attribute, in part, to employers hiring workers that they can later lay off rather than making longer-term commitments to investment.

The unemployment rate unexpectedly rose slightly to 3.9% from 3.8% which had been its lowest since the three months to January 1975, the ONS said.

However, some surveys of companies have suggested employers are turning more cautious about hiring as Britain approaches its new Brexit deadline of Oct. 31.

The ONS said vacancies fell again to 813,000, touching their lowest level since the three months to November 2017.

The trend in pay growth is being watched closely by the Bank of England. Deputy Governor Dave Ramsden said in a newspaper interview published on Sunday that company wage costs were “picking up quite significantly, which will drive domestic inflationary pressure.”

However, the BoE is widely expected to wait for more clarity on Brexit – which it fears could damage Britain’s economy if there is no deal with Brussels to ease the transition – before any decision to resume its gradual and limited program of interest rates hikes.


Company: cnbc, Activity: cnbc, Date: 2019-10-15
Keywords: news, cnbc, companies, rose, rate, ahead, boom, pay, growth, unexpectedly, jobs, ons, employment, falls, cools, months, brexit


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Bernie Sanders unveils plan to raise corporate tax rate to 35% and ban stock buybacks

Democratic presidential hopeful Bernie Sanders introduced a plan on Monday that would reverse President Donald Trump’s tax cuts for businesses and return the corporate tax rate to 35% from its current 21%. The Corporate Accountability and Democracy Plan would also eliminate many of the tax breaks and loopholes in the tax code and do away with off-shore tax havens. The senator is also calling to democratize corporate boards, ban stock buybacks and diversify corporations. Large-scale stock buyback


Democratic presidential hopeful Bernie Sanders introduced a plan on Monday that would reverse President Donald Trump’s tax cuts for businesses and return the corporate tax rate to 35% from its current 21%. The Corporate Accountability and Democracy Plan would also eliminate many of the tax breaks and loopholes in the tax code and do away with off-shore tax havens. The senator is also calling to democratize corporate boards, ban stock buybacks and diversify corporations. Large-scale stock buyback
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Company: cnbc, Activity: cnbc, Date: 2019-10-14  Authors: valerie block
Keywords: news, cnbc, companies, tax, corporation, bernie, million, companies, rate, sanders, elizabeth, raise, unveils, plan, corporate, 100, workers, stock, buybacks


Bernie Sanders unveils plan to raise corporate tax rate to 35% and ban stock buybacks

Vermont senator and presidential candidate Bernie Sanders campaigns at the University of New Hampshire in Durham.

Democratic presidential hopeful Bernie Sanders introduced a plan on Monday that would reverse President Donald Trump’s tax cuts for businesses and return the corporate tax rate to 35% from its current 21%.

The Corporate Accountability and Democracy Plan would also eliminate many of the tax breaks and loopholes in the tax code and do away with off-shore tax havens.

The senator is also calling to democratize corporate boards, ban stock buybacks and diversify corporations.

The detailed plan includes these highlights, according to the campaign website:

Nearly half of the board of directors in any large corporation with at least $100 million in annual revenue, corporations with at least $100 million in balance sheet total, and all publicly traded companies would be directly elected by the firm’s workers.

They would be required to consider the interests of all of the stakeholders in a company – including workers, customers, shareholders and the communities in which the corporation operates.

Large-scale stock buybacks would be “treated like stock manipulation” via repeal of the Securities and Exchange Commission’s Rule 10b-18.

Rules would be developed to diversify corporate boards “ensuring a significant portion of every board be comprised of people from historically underrepresented groups.” And they would require every corporation to “complete an annual report that gives the compensation, gender, and racial composition of board and employees.”

The plan “will give workers an ownership stake in the companies they work for, break up corrupt corporate mergers and monopolies, and finally make corporations pay their fair share,” the Vermont independent’s campaign website said. “When Bernie is president, we’re going to put an end to the corporate greed ruining our country once and for all.”

According to the website, the plan would also require companies that are publicly traded or have at least $100 million in annual revenue or at least $100 million in their balance sheet total to give workers 2% of their stock until employees own at least 20 percent of the company.

Sanders, who is recovering from a heart attack, revealed the plan a day before the third Democratic debate that takes place Tuesday night.

Sanders, who considers himself a democratic socialist, has vowed to continue his candidacy, but he has slipped in the polls in recent months, falling behind rival Sen. Elizabeth Warren, D-Mass., in many polls.

While the two are often lumped together as progressives, he is trying to accentuate the differences between himself and Warren, saying in an interview with ABC’s “This Week” on Sunday that she is a capitalist and he is not.

“There are differences between Elizabeth and myself,” he told ABC. “Elizabeth, I think, as you know, has said that she is a capitalist through her bones. I’m not.”

Warren did not immediately respond to a request for comment.


Company: cnbc, Activity: cnbc, Date: 2019-10-14  Authors: valerie block
Keywords: news, cnbc, companies, tax, corporation, bernie, million, companies, rate, sanders, elizabeth, raise, unveils, plan, corporate, 100, workers, stock, buybacks


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Investors are flocking to money markets at the highest rate since the financial crisis

Investors are flocking to the relative safety of money market funds at the highest level since the financial crisis-era collapse of Lehman Brothers in 2008. On the bright side: That was a period which preceded the buying era of a lifetime for stock market participants. Total money market assets assets are now at their highest level since September 2009. Facing a constant drumbeat of headline risk, investors have headed to the mattresses as a way protect cash until the storms clear. The Dow Jones


Investors are flocking to the relative safety of money market funds at the highest level since the financial crisis-era collapse of Lehman Brothers in 2008. On the bright side: That was a period which preceded the buying era of a lifetime for stock market participants. Total money market assets assets are now at their highest level since September 2009. Facing a constant drumbeat of headline risk, investors have headed to the mattresses as a way protect cash until the storms clear. The Dow Jones
Investors are flocking to money markets at the highest rate since the financial crisis Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-12  Authors: jeff cox
Keywords: news, cnbc, companies, investors, crisis, past, trade, money, weeks, market, flocking, assets, highest, markets, rate, stock, level, positive, talks, financial


Investors are flocking to money markets at the highest rate since the financial crisis

Investors are flocking to the relative safety of money market funds at the highest level since the financial crisis-era collapse of Lehman Brothers in 2008.

The industry has pulled in $322 billion over the past six months, the fastest pace since the second half of 2008, bringing assets to nearly $3.5 trillion, according to data from FactSet and Bank of America Merrill Lynch.

On the bright side: That was a period which preceded the buying era of a lifetime for stock market participants. In March 2009, Wall Street kicked off a bull market, still intact, that would break records for longevity.

“You could be contrarian and say [the money market flow is] positive, because if the market actually steadies itself and there’s a detente [in the trade war], that money’s going to go back into the equity market,” said Quincy Krosby, chief market strategist at Prudential Financial. “From a contrarian standpoint, it would be helpful.”

Total money market assets assets are now at their highest level since September 2009.

The funds have seen inflows every month this year except for April, with assets growing nine of the past 10 weeks as the stock market has wrestled with myriad issues, primarily involving the trade dispute with China and lingering worries that the U.S. is heading toward a possible recession.

Facing a constant drumbeat of headline risk, investors have headed to the mattresses as a way protect cash until the storms clear.

“There’s been enough headlines, whether you’re talking politics, trade concerns or whether or not we’re heading into recession for the money to go into those markets,” Krosby said.

Stocks, in fact, have been on a roller coaster for the past year, tumbling at signs of a break in the U.S.-China talks then rallying on any ray of hope. The Dow Jones Industrial Average surged more than 400 points Friday on some positive sentiments out of the White House that this week’s trade talks could yield fruit.


Company: cnbc, Activity: cnbc, Date: 2019-10-12  Authors: jeff cox
Keywords: news, cnbc, companies, investors, crisis, past, trade, money, weeks, market, flocking, assets, highest, markets, rate, stock, level, positive, talks, financial


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The Fed is extending its overnight funding operations through January 2020

The Federal Reserve will be continuing its overnight funding operations through at least January and will start buying Treasury bills next week through the second quarter of 2020, the central bank announced Friday. The announcement comes as Chairman Jerome Powell also said that the Fed will be expanding the size of its $4 trillion balance sheet through further short-term T-bill purchases. Documents from the central bank state the overnight repurchase operations “at least through January” and wil


The Federal Reserve will be continuing its overnight funding operations through at least January and will start buying Treasury bills next week through the second quarter of 2020, the central bank announced Friday. The announcement comes as Chairman Jerome Powell also said that the Fed will be expanding the size of its $4 trillion balance sheet through further short-term T-bill purchases. Documents from the central bank state the overnight repurchase operations “at least through January” and wil
The Fed is extending its overnight funding operations through January 2020 Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-11  Authors: jeff cox
Keywords: news, cnbc, companies, overnight, tbill, sheet, purchases, bank, rate, powell, funding, targeted, reserves, extending, 2020, operations, fed, balance


The Fed is extending its overnight funding operations through January 2020

The Federal Reserve will be continuing its overnight funding operations through at least January and will start buying Treasury bills next week through the second quarter of 2020, the central bank announced Friday.

The T-bill purchases will be large — $60 billion in the first month despite Fed officials’ insistence that the operation will be an “organic” move to grow the central bank’s balance sheet and the level of bank reserves, as well as to keep the benchmark funds rate within its targeted range. The purchases will involve maturities of between five and 52 weeks.

Following a disruption in short-term lending markets in mid-September that sent interest rates soaring, the Fed began conducting its own operations to provide financial institutions with cash in exchange for ultra-safe assets like government bonds.

Most recently, the Fed said the repo operation would end Nov. 4.

The announcement comes as Chairman Jerome Powell also said that the Fed will be expanding the size of its $4 trillion balance sheet through further short-term T-bill purchases.

Fed officials met by video conference on Oct. 4 to discuss “issues related to the recent pressures in money markets and monetary policy implementation,” according to a news release.

Documents from the central bank state the overnight repurchase operations “at least through January” and will be buying T-bills “at least into the second quarter of next year.”

On the latter operation, Powell has been adamant in pointing out that the T-bill purchases, though aimed at expanding the Fed’s balance sheet and, correspondingly, bank reserves, this should not be confused with the quantitative easing that occurred during and after the financial crisis.

Under QE, the Fed sought to lower long-term rates and push the appetite for risk assets. The balance sheet expansion will be “organic,” Powell has said, and will be targeted at making sure bank reserves are plentiful and that the Fed’s benchmark overnight borrowing rate stays within its targeted range. During the September cash crunch, the funds rate briefly rose 5 basis points above the range.

This is breaking news. Check back here for updates.


Company: cnbc, Activity: cnbc, Date: 2019-10-11  Authors: jeff cox
Keywords: news, cnbc, companies, overnight, tbill, sheet, purchases, bank, rate, powell, funding, targeted, reserves, extending, 2020, operations, fed, balance


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To get in to a top college, your character matters, too

Steve Shepard | Getty ImagesMost people consider getting in to college a numbers game. However, in the wake of last year’s college admissions scandal, which underscored how much pressure parents and students feel to be accepted into elite universities, admissions directors are quietly turning their attention to something besides test scores. Today, “almost every institution is looking more carefully at character,” said Eric Greenberg, president of Greenberg Educational Group, a New York-based co


Steve Shepard | Getty ImagesMost people consider getting in to college a numbers game. However, in the wake of last year’s college admissions scandal, which underscored how much pressure parents and students feel to be accepted into elite universities, admissions directors are quietly turning their attention to something besides test scores. Today, “almost every institution is looking more carefully at character,” said Eric Greenberg, president of Greenberg Educational Group, a New York-based co
To get in to a top college, your character matters, too Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-11  Authors: jessica dickler
Keywords: news, cnbc, companies, rate, looking, president, greenberg, applicants, low, college, students, matters, university, admissions, character


To get in to a top college, your character matters, too

Steve Shepard | Getty Images

Most people consider getting in to college a numbers game. However, in the wake of last year’s college admissions scandal, which underscored how much pressure parents and students feel to be accepted into elite universities, admissions directors are quietly turning their attention to something besides test scores. Today, “almost every institution is looking more carefully at character,” said Eric Greenberg, president of Greenberg Educational Group, a New York-based consulting firm with clients throughout the U.S. “Authenticity and honesty are at a premium,” he said. Seeing applicants who are “excited and deeply engaged has made the difference,” said Jon Daly, the admissions director at Thomas Aquinas College in Santa Paula, California, which requires several essays and letters of recommendations as part of its application process.

Almost every institution is looking more carefully at character. Eric Greenberg president of Greenberg Educational Group

Of course, non-academic factors have been used in an ad hoc way for years, according to Robert Massa, a former admissions dean at Drew University, Johns Hopkins and Dickinson College. “It’s going to become even more important in the years ahead,” he said, especially at the most selective institutions as more and more students apply. Last spring, Princeton University offered admission to just 5.8% of its 32,804 applicants, Yale hit an admissions rate low of 5.9% and, at Harvard, the admission rate hit a record low 4.5% of applicants securing spots in the Class of 2023.


Company: cnbc, Activity: cnbc, Date: 2019-10-11  Authors: jessica dickler
Keywords: news, cnbc, companies, rate, looking, president, greenberg, applicants, low, college, students, matters, university, admissions, character


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‘Yellow flag on recession risk’: Top forecaster warns of cracks in consumer spending

There’s a worrisome trend forming in the rate of real consumer spending, also known as PCE, or personal consumption expenditures, said Lakshman Achuthan, co-founder of the Economic Cycle Research Institute. “We’ve been tracking the overall economy slowing, jobs growth slowing, manufacturing slowing, and the hope has been that the consumer’s just going to bail everybody out,” he said, citing the chart below. “Here we see that the … consumer spending slowdown is very much in line with the jobs gro


There’s a worrisome trend forming in the rate of real consumer spending, also known as PCE, or personal consumption expenditures, said Lakshman Achuthan, co-founder of the Economic Cycle Research Institute. “We’ve been tracking the overall economy slowing, jobs growth slowing, manufacturing slowing, and the hope has been that the consumer’s just going to bail everybody out,” he said, citing the chart below. “Here we see that the … consumer spending slowdown is very much in line with the jobs gro
‘Yellow flag on recession risk’: Top forecaster warns of cracks in consumer spending Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-10  Authors: lizzy gurdus
Keywords: news, cnbc, companies, rate, lot, slowing, achuthan, cracks, yellow, risk, consumer, flag, slowdown, forecaster, warns, going, growth, recession, low, spending


'Yellow flag on recession risk': Top forecaster warns of cracks in consumer spending

Are U.S. consumers spent?

There’s a worrisome trend forming in the rate of real consumer spending, also known as PCE, or personal consumption expenditures, said Lakshman Achuthan, co-founder of the Economic Cycle Research Institute.

After a “cyclical upturn” in spending growth in 2016 and 2017 — and additional boosts from rebuilding after Hurricane Harvey and the Trump administration’s tax cuts going into effect — spending has gone into a sustained decline, which could be a “yellow flag” in terms of recessionary risk, Achuthan said Wednesday on CNBC’s “Trading Nation.”

“We’ve been tracking the overall economy slowing, jobs growth slowing, manufacturing slowing, and the hope has been that the consumer’s just going to bail everybody out,” he said, citing the chart below.

“Here we see that the … consumer spending slowdown is very much in line with the jobs growth slowdown and the overall slowdown,” Achuthan said.

Now, consumer spending growth is at roughly a 2½-year low excluding the sharp nosedive that occurred in December 2018, the economic forecaster said.

To make matters worse, soft data like corporate and consumer sentiment surveys have turned lower, and intentions to buy big-ticket items like furniture or appliances haven’t looked this bad since “the lead-up to past recessions,” he said.

For those who believe the U.S. consumer will successfully stave off an oncoming domestic slowdown, that could pose serious problems, Achuthan warned.

“Let me boil it down: a recession is not imminent. It’s not right here. But it is certainly on the table,” he said. “You can’t take it off the table. There’s a lot of data kind of edging in the wrong direction. And I’m just concerned about this super optimistic story that the consumer is going to bail us out even though manufacturing is really decelerating. See, when you’re in a growth rate cycle downturn and it’s decelerating, deteriorating, that’s when you have a yellow flag on recession risk. You have to take it seriously.”

That could put the Federal Reserve in a difficult position with consumer prices, which are tracked by the Labor Department’s consumer price index, or CPI, at their weakest levels since January. Thursday’s reading bolstered expectations for another rate cut this year.

“How much of this kind of egging consumers on with low rates can you do? It’s not like we haven’t been doing it,” Achuthan said. “We’ve been pulling a lot of demand forward. Maybe we can do it one more time, but rates are already pretty darn low. I must say that the bond market certainly seems to be — while it’s doing a lot of other things — pricing in some slowing in growth ahead.”


Company: cnbc, Activity: cnbc, Date: 2019-10-10  Authors: lizzy gurdus
Keywords: news, cnbc, companies, rate, lot, slowing, achuthan, cracks, yellow, risk, consumer, flag, slowdown, forecaster, warns, going, growth, recession, low, spending


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Here’s how the Fed’s balance sheet expansion that’s got the market excited is going to work

The intent will be to find the right amount of reserves to pump into the system and to keep its benchmark funds rate within its target range. Boockvar noted that prior to the financial crisis, the Fed’s balance sheet generally expanded about in step with GDP growth, so this process shouldn’t be much different. From QE to SOAPUltimately, what the operation is called will matter less than how it is executed and communicated. Their concern is trying to avoid the cash shortages that are causing rate


The intent will be to find the right amount of reserves to pump into the system and to keep its benchmark funds rate within its target range. Boockvar noted that prior to the financial crisis, the Fed’s balance sheet generally expanded about in step with GDP growth, so this process shouldn’t be much different. From QE to SOAPUltimately, what the operation is called will matter less than how it is executed and communicated. Their concern is trying to avoid the cash shortages that are causing rate
Here’s how the Fed’s balance sheet expansion that’s got the market excited is going to work Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-10  Authors: jeff cox
Keywords: news, cnbc, companies, rate, excited, expansion, thats, reserves, rates, bank, heres, going, feds, target, market, sheet, balance, work, program, fed


Here's how the Fed's balance sheet expansion that's got the market excited is going to work

Investors likely will have to wait a few weeks before finding out how the Federal Reserve will resume its asset purchase program, but Wall Street already is beginning to handicap what it expects — and what to call it. Key issues will be how ambitious the program will be, and how the market will perceive what the Fed is doing: Is this another attempt at the Fed to start the quantitative easing “money-printing” program to goose a slowing economy, or is it just taking care of business as it did in the days before its unprecedented financial crisis-era efforts to manage growth? What is already known is that the central bank will be buying hundreds of billions of dollars in short-term Treasury bills, denominated in months rather than years, then crediting banks with reserves at the Fed. The intent will be to find the right amount of reserves to pump into the system and to keep its benchmark funds rate within its target range.

So operationally, it will look a lot like QE. But in terms of the end goal, there’s a big difference between wanting to rescue a sliding economy and looking to keep interest rates in check and liquidity flowing through the banking system. “This is not QE or even QE lite,” wrote Krishna Guha, head of global policy and central bank strategy for Evercore ISI, though he noted that “the additional flow may still be welcomed by market participants.” “This is night and day with their previous QE attempt,” observed Peter Boockvar, chief investment officer at Bleakley Advisory Group, who called the process “just modern day open market operations and nothing more.” Boockvar noted that prior to the financial crisis, the Fed’s balance sheet generally expanded about in step with GDP growth, so this process shouldn’t be much different.

From QE to SOAP

Ultimately, what the operation is called will matter less than how it is executed and communicated. “In some sense it doesn’t matter why they’re doing it or what they call it. What matters is that they are creating base money and expanding their balance sheet, and those repercussions aren’t going to depend on what they call it,” George Selgin, senior fellow and director of the libertarian Cato Institute’s Center for Monetary and Financial Alternatives, said in an interview. “There is an important issue of public perception here,” he continued. “I suppose calling it QE would give people the impression that the Fed is fighting a recession again, or thinks it is fighting a recession again, and trying to create a positive stimulus for the economy. Neither of these things is true. Their concern is trying to avoid the cash shortages that are causing rates to rise above their target.” Indeed, the talk of balance sheet expansion has accelerated over the past month, since the mid-September cash crunch in overnight lending markets caused a spike in very short-term rates and the Fed’s own benchmark funds rate to climb above its target rate by 5 basis point. However, the issue has been popping up periodically since last year when the funds rate started to edge near its upper border. The Fed made a couple “technical adjustments” to the interest rate it pays on bank reserves stored at the central bank, but that was not enough to address the issue completely. Selgin, in fact, coined his own term for what is ahead: “Supplementary Organic Asset Purchases,” or SOAP. Fed officials have stressed the “organic” nature of balance sheet growth as opposed to QE.

Expansion estimates vary


Company: cnbc, Activity: cnbc, Date: 2019-10-10  Authors: jeff cox
Keywords: news, cnbc, companies, rate, excited, expansion, thats, reserves, rates, bank, heres, going, feds, target, market, sheet, balance, work, program, fed


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In a falling rate environment, a different kind of CD can protect your savings

The Federal Reserve is expected to cut interest rates again later this month. High-yield savings accounts, which are generally offered by internet-only banks or subsidiaries, make you more money. Savings account yields have been decreasing as a result, although as an October MagnifyMoney.com report points out, online savings accounts “haven’t yet fallen as far.” This summer, Goldman Sachs’ Marcus and Ally cut their savings rates for the first time, each by 0.1%. In fact, traders are betting with


The Federal Reserve is expected to cut interest rates again later this month. High-yield savings accounts, which are generally offered by internet-only banks or subsidiaries, make you more money. Savings account yields have been decreasing as a result, although as an October MagnifyMoney.com report points out, online savings accounts “haven’t yet fallen as far.” This summer, Goldman Sachs’ Marcus and Ally cut their savings rates for the first time, each by 0.1%. In fact, traders are betting with
In a falling rate environment, a different kind of CD can protect your savings Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: bob sullivan, alizah salario, sam becker, lisa ferber
Keywords: news, cnbc, companies, rates, months, falling, different, environment, interest, accounts, kind, savers, savings, earn, cut, rate, highyield, protect


In a falling rate environment, a different kind of CD can protect your savings

The Federal Reserve is expected to cut interest rates again later this month. As rates fall, securing a steady return through a low-commitment certification of deposit (CD) is becoming a more appealing option for savers. With a traditional CD, you can’t withdraw money for a predetermined length of time – like six months, 12 months, or even five years – without paying for the privilege. But some banks are offering no-penalty CDs that do away with that caveat. Savers benefit from a fixed interest rate for a set period, and you can withdraw without penalty. “In a falling rate environment, it’s a good option,” Ken Tumin, founder of DepositAccounts.com, told Grow earlier this year.

Falling interest rates can affect your savings

Savings accounts don’t usually provide much interest. The average traditional savings account pays roughly 0.09% annually, according to the FDIC. That’s 9 cents for every $100 after one year. High-yield savings accounts, which are generally offered by internet-only banks or subsidiaries, make you more money. Right now, rates hover around 2% at Ally bank, Barclay’s, and Discover, so savers earn about $2 for every $100 annually. If your emergency fund holds $10,000, you’ll earn about $200 each year in a high-yield account.

The Fed has cut rates twice this year, in July and September, however. Savings account yields have been decreasing as a result, although as an October MagnifyMoney.com report points out, online savings accounts “haven’t yet fallen as far.” This summer, Goldman Sachs’ Marcus and Ally cut their savings rates for the first time, each by 0.1%. After further cuts, as of early October, both offer 1.9% yields. Market observers expect more rate cuts in the next few months. In fact, traders are betting with about 83% probability that central bankers will cut interest rates when they meet later this month. That means, even with a high-yield account, you could earn less interest on your savings. That can make CDs a more attractive option.

CDs help you lock in a rate


Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: bob sullivan, alizah salario, sam becker, lisa ferber
Keywords: news, cnbc, companies, rates, months, falling, different, environment, interest, accounts, kind, savers, savings, earn, cut, rate, highyield, protect


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Market may be expecting more rate cuts than the Fed will deliver, meeting minutes show

Some Federal Reserve policymakers expressed concern at their most recent meeting that markets are expecting more rate cuts than the central bank intends to deliver, according to minutes released Wednesday. The Federal Open Market Committee approved a quarter-point rate cut at the Sept. 17-18 meeting, putting the overnight funds rate in a target range of 1.75% to 2%. But documents released at the meeting also showed sharp divisions among members about the future path of policy. As things stand, m


Some Federal Reserve policymakers expressed concern at their most recent meeting that markets are expecting more rate cuts than the central bank intends to deliver, according to minutes released Wednesday. The Federal Open Market Committee approved a quarter-point rate cut at the Sept. 17-18 meeting, putting the overnight funds rate in a target range of 1.75% to 2%. But documents released at the meeting also showed sharp divisions among members about the future path of policy. As things stand, m
Market may be expecting more rate cuts than the Fed will deliver, meeting minutes show Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: jeff cox
Keywords: news, cnbc, companies, deliver, federal, cuts, path, minutes, meeting, market, markets, expecting, policymakers, released, rate, policy, fed


Market may be expecting more rate cuts than the Fed will deliver, meeting minutes show

Some Federal Reserve policymakers expressed concern at their most recent meeting that markets are expecting more rate cuts than the central bank intends to deliver, according to minutes released Wednesday.

The Federal Open Market Committee approved a quarter-point rate cut at the Sept. 17-18 meeting, putting the overnight funds rate in a target range of 1.75% to 2%.

But documents released at the meeting also showed sharp divisions among members about the future path of policy.

Minutes amplified those concerns, along with some worry that a market clamoring for easier monetary policy might be getting ahead of itself. The summary said that “a few participants” at the September meeting said prices in futures markets “were currently suggesting greater provision of accommodation at coming meetings than they saw as appropriate.”

As things stand, markets are heavily betting that the Fed will follow up its rate cuts of July and September with another in October. Markets also see more reductions on the way in 2020.

Because of the potential misunderstanding, “it might become necessary for the Committee to seek a better alignment of market expectations regarding the policy rate path with policymakers’ own expectations for that path,” the minutes stated.


Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: jeff cox
Keywords: news, cnbc, companies, deliver, federal, cuts, path, minutes, meeting, market, markets, expecting, policymakers, released, rate, policy, fed


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