Many consumers are looking for financial stability in the short term. They also want to benefit from lower borrowing costs in the medium to long term. Balancing this act isn’t easy, according to Bankrate senior economic analyst Mark Hamrick.Judging from the commentaries of the last 24 hours, it is proving convenient for quite a few to cite "positioning" as the major cause of the recent market volatility.
— Mohamed A. El-Erian (@elerianm) August 7, 2024
This enables Wall Street to describe the stock market pullback as "healthy;" and it allows the Fed to deflect…
“We should hope for the best,” he said, but “prepare for some possible outcomes that are less than optimal.”The ongoing debate on Fed policy is focused on whether the Fed should cut inter-meetings or in September, and by how much.
— Mohamed A. El-Erian (@elerianm) August 6, 2024
It needs to go beyond this and also focus on the opportunity Chair Powell has at Jackson Hall to regain control of the narrative and anchor forward policy…
Experts suggest taking advantage of high-yield savings accounts now. Most analysts don’t expect the Fed to cut its benchmark rate more than 0.5 percentage points initially. This means high-yield savings accounts are likely to remain appealing.Current Market expectations for Fed Rate Cuts…
— Charlie Bilello (@charliebilello) August 7, 2024
-Sep 18, 2024: 50 bps cut to 4.75-5.00%
-Nov 7, 2024: 25 bps cut to 4.50-4.75%
-Dec 18, 2024: 25 bps cut to 4.25-4.50%
-Jan 25, 2025: 25 bps cut to 4.00-4.25%
-Mar 19, 2025: 25 bps cut to 3.75-4.00%
Video: https://t.co/PU3gn1fTbD pic.twitter.com/xuqDaimCyG
However, several experts cautioned against over-relying on high-yield CDs. If you’re close to retirement or have a fixed income, a short-term CD might be an attractive option. But cashing out a CD early usually entails a penalty. Now is also the time to pay down credit card balances. Chipping away at your debt and improving your credit score can position you to take advantage of better borrowing conditions. Simply asking about discounts and special promotions can help, especially when the central bank lowers interest rates. It might seem counterintuitive to buy stock in the wake of market fluctuations.Bill Dudley: The Fed needs to get interest rates to a neutral setting, and that is probably 150-200 bps below where rates are presently set https://t.co/eyTbprXe7f
— Nick Timiraos (@NickTimiraos) August 7, 2024