Fed approves 0.75-point hike to take rates to highest since 2008 and hints at change in policy ahead

[Guest]

Fed approves 0.75-point hike to take rates to highest since 2008 and hints at change in policy ahead

WWW.CNBC.COM

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The Federal Reserve concluded its two-day meeting Wednesday.

A few interesting bits in here

 

Quote

Concerns are rising that the Fed, in its efforts to bring down the cost of living, also will pull the economy into recession. Powell has said he still sees a path to a “soft landing” in which there is not a severe contraction, but the U.S. economy this year has shown virtually no growth even as the full impact from the rate hikes has yet to kick in.

At the same time, the Fed’s preferred inflation measure showed the cost of living rose 6.2% in September from a year ago – 5.1% even excluding food and energy costs. GDP declined in both the first and second quarters, meeting a common definition of recession, though it rebounded to 2.6% in the third quarter largely because of an unusual rise in exports. At the same time, housing prices have plunged as 30-year mortgage rates have soared past 7% in recent days.

 

[CitizenVectron]

The solution is simple: everyone get jobs that pay 7% better

[TUFKAK]

But parents in Canada don’t like unions is what I’ve learned from this board.

 

only good news from this is my high yield savings will keep paying me more.

[SaysWho?]

9 minutes ago, TUFKAK said:

But parents in Canada don’t like unions is what I’ve learned from this board.

 

only good news from this is my high yield savings will keep paying me more.

 

Same. Gf and I have been killing it through high yield savings + referrals.

[rc0101]

Nearly every bank is seeing their unrealized loss on securities explode with rates rising. So expect to get some very nice CD and Savings rates assuming demand for credit doesn’t fall off a cliff. 

[Guest]

I mean, if you’re just going to park cash in savings then more interest is better than less interest, but the net value of those dollars is decreasing still  

[rc0101]

Just because fed raises rates doesn’t mean a bank has to raise their deposit rates 

[SaysWho?]

1 minute ago, rc0101 said:

Just because fed raises rates doesn’t mean a bank has to raise their deposit rates 

 

They are, though! Every time the fed raises rates, we give it a few days/a week and we get an email about our new rate.

 

So they don't have to, but they're being very polite.  

[Joe]

9 minutes ago, sblfilms said:

I mean, if you’re just going to park cash in savings then more interest is better than less interest, but the net value of those dollars is decreasing still  

 

I bonds baby.

[TUFKAK]

9 minutes ago, sblfilms said:

I mean, if you’re just going to park cash in savings then more interest is better than less interest, but the net value of those dollars is decreasing still  

Hey, my emergency and sinking fund better make me some gods damned money!

[Guest]

1 minute ago, Joe said:

 

I bonds baby.

I just logged into treasury direct and looked at my I bonds and GASPED 😂

[rc0101]

10 minutes ago, SaysWho? said:

 

They are, though! Every time the fed raises rates, we give it a few days/a week and we get an email about our new rate.

 

So they don't have to, but they're being very polite.  

Yes us bankers are always looking out for the little guy!

 

*Just please don’t take a glance at my loan to deposit ratio or unrealized losses* 

[Guest]

@rc0101what is your bank’s general outlook for the banking industry over the next 12-24 months?

[rc0101]

34 minutes ago, sblfilms said:

@rc0101what is your bank’s general outlook for the banking industry over the next 12-24 months?

Oh God…Short answer: ask me in 12-24 months 

 

long answer based only on my pov in my specific area - good for consumer, bad for community banks and profitable for FI’s structured correctly. 
 

Good because I think you are seeing the death signs of overdraft fees, nsf fees etc. 

Bad - Community banks will continue to disappear, being gobbled up by regional banks and those communities they served will only be a number. Credit Unions will and have been filing that void on the consumer side but it will be interesting to see what they do on the business side.
Traditionally the life cycle of a successful business was: Startup with community bank for 5-7 years - succeed and outgrow community bank - move onto larger bank with lower rates since they have a proven history of success and are too large for community bank. Not sure CU’s will fill that void, here they aren’t. 
 

Profitable - depends on rates not cratering in the next 12 months, for us anyway. 

[Ominous]