Thursday, September 11, 2014

Rising Interest Rates


Lots of news these days about interest rates going up in the USA but today I saw concrete evidence. Ally Bank raised the interest rate on my savings account from 0.87% to 0.9%.   It is not much, only a 3.5% increase but it is the first increase in about 2 years for Ally, and I noticed that other online banks are offering even higher rates.

Most news reports say that the Federal Reserve will raise short term rates in 1Q15 or 2Q15.  On the other hand, the ECB is hinting at Quantitative Easing, which should reduce Euro interest rates.  The net, in my opinion, will be a moderate rise in real interest rates (loans, savings, bonds) in the USA over the next year or so.

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