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News Link • Federal Reserve

The Fed Move Slams Savers, And Is A Huge Gift To The Banks

See what just happened there? The Fed announced $600 billion of new bond buying, much of it focused on the short end of the curve. Yields on the long end -- where there will be very little buying -- have shot up. Of course, that's great news for banks, which desperately desire a steeper yield curve in order to make money borrowing short and lending long. And it kills savers, punishing those who would park their money in short-term safe vehicles (CDs, savings accounts, etc.), pushing them to go long. Classic. And you can see nicely how the curve has moved on this chart comparing today to yesterday. It's a bit tough to see, but just note that the green line is today's, steeper curve:

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