Sick & tired of the reporting it’s great news the Fed may be cutting interest rates!

[tophcfa]

The media is downright giddy that the most recent inflation report indicates the Fed might soon be cutting interest rates. Exactly how is that good news for responsible senior citizens who have saved their hard earned money, avoided debt, and want to earn a reasonable real rate of return above inflation on their savings?

[JoMar]

The media is downright giddy that the most recent inflation report indicates the Fed might soon be cutting interest rates. Exactly how is that good news for responsible senior citizens who have saved their hard earned money, avoided debt, and want to earn a reasonable real rate of return above inflation on their savings?

If the market reacts in a positive increase to our savings I suggest our investments will earn a reasonable real rate of return.

[blueash]

The average American is not living on income earned from their savings as they have little savings. In fact they have more debt than savings. They have student debt, they have mortgage debt or hope to get a mortgage, they have credit card debt and maybe a car loan debt.

So for most people having a lower interest rate is good news as their mortgage goes down, student loan payment goes down, credit card payment goes down and they can buy a new car. The economy does not and should not be run to benefit wealthy retirees. They're doing fine even if they make less on their CDs and savings accounts.

[FloridaGuy66]

If you own dividend paying stocks like Chevron for example, the stocks value normally will edge upwards when the interest rates go down as the dividend rate is then effectively offering a larger spread vs CDs.

[OrangeBlossomBaby]

The media is downright giddy that the most recent inflation report indicates the Fed might soon be cutting interest rates. Exactly how is that good news for responsible senior citizens who have saved their hard earned money, avoided debt, and want to earn a reasonable real rate of return above inflation on their savings?

It's bad news for rich old people only to the extent that they'll have fewer pieces of gold to fill their coffins with when they're buried.

It's good news for anyone who has debt in any legal institution that charges interest.

It has zero impact on anyone who has neither savings nor debt.

[blueash]

It's bad news for rich old people only to the extent that they'll have fewer pieces of gold to fill their coffins with when they're buried.

It's good news for anyone who has debt in any legal institution that charges interest.

It has zero impact on anyone who has neither savings nor debt.

Not really true. Higher interest rates do not just apply to individuals but also to businesses. So high rates cost businesses money (other than banks) when they use debt to buy materials, build factories, etc. And that higher cost of money is then passed on to consumers. So lower interest rates benefit consumers whether they have neither savings nor debt.

[Stu from NYC]

The media is downright giddy that the most recent inflation report indicates the Fed might soon be cutting interest rates. Exactly how is that good news for responsible senior citizens who have saved their hard earned money, avoided debt, and want to earn a reasonable real rate of return above inflation on their savings?

Once upon a time the media would just report the news

[Caymus]

Without a major recession, I doubt that interest rates will drop significantly. The treasury will still need to borrow money to fund the massive budget deficit.

[ThirdOfFive]

" Since the mid-1940s, the United States has experienced several boom and bust cycles. Why do we have a boom and bust cycle instead of a long, steady economic growth period? The answer can be found in the way central banks handle the money supply.

During a boom, a central bank makes it easier to obtain credit by lending money at low interest rates. Individuals and businesses can then borrow money easily and cheaply and invest it in, say, technology stocks or houses. Many people earn high returns on their investments, and the economy grows.

The problem is that when credit is too easy to obtain and interest rates are too low, people will overinvest. This excess investment is called “malinvestment.” There won’t be enough demand for, say, all the homes that have been built, and the bust cycle will set in. Things that have been overinvested in will decline in value. Investors lose money, consumers cut spending and companies cut jobs. Credit becomes more difficult to obtain as boom-time borrowers become unable to make their loan payments. The bust periods are referred to as recessions; if the recession is particularly severe, it is called a depression." ("Boom and Bust Cycle: Definition, How It Works, and History", Adam Hayes, Investopedia dot com, 5/19/2024)

What is the common denominator? IMO, greed. And not a few boneheaded government actions.

[opinionist]

Raise rates, and the economy crashes.
Cut rates and the dollar crashes.
Pick your poison.

[CoachKandSportsguy]

Raise rates, and the economy crashes.
Cut rates and the dollar crashes.
Pick your poison.

That's pretty histrionic, don't you think?
neither will happen as the Fed will only change by 1/4 of a percent this month,
and that is not enough to change anything, even 1/2 of a percent, its not enough to change anything momentarily, especially with the 18-24 month effect to the economy

The interest rate curve is primary shaped by the treasury, as they auction bills, notes and bonds at various total amounts. Mortgage rates are already down by about 1 percentage point, and nothing much has changed in the housing market.

So, meh, right now, is all about inflation expectations and real rates shifting the curve down somewhat, and everyone waiting on the Treasury QRA for borrowing requirements. . How much more will be needed to fund the choices of congress and the current and past presidents?

[bshuler]

In July, on a new home in TV I got a 30 year rate quote of 7% from Citizens First.
Tuesday I got a rate of 5.875% on a 30 through National Bank of Kansas City (nbkc).
Loan officer claims rate cut has already been built into the market.

[retiredguy123]

The media is downright giddy that the most recent inflation report indicates the Fed might soon be cutting interest rates. Exactly how is that good news for responsible senior citizens who have saved their hard earned money, avoided debt, and want to earn a reasonable real rate of return above inflation on their savings?
I agree. Often, the Fed will lower interest rates so low that it rewards borrowers and punishes savers. People should be encouraged to save money and to avoid debt. The market should determine interest rates, not the Fed. That is my opinion.

[Jayhawk]

What is the common denominator? IMO, greed.

Please explain.

[justjim]

The average American is not living on income earned from their savings as they have little savings. In fact they have more debt than savings. They have student debt, they have mortgage debt or hope to get a mortgage, they have credit card debt and maybe a car loan debt.

So for most people having a lower interest rate is good news as their mortgage goes down, student loan payment goes down, credit card payment goes down and they can buy a new car. The economy does not and should not be run to benefit wealthy retirees. They're doing fine even if they make less on their CDs and savings accounts.

Yes, 40% of Americans DO NOT have $400.00 in their “cookie jar” when they need it. Can you imagine? That is roughly 134,000,000 Americans.

[dtennent]

Boom bust cycles have been going on since the founding of our country. The Fed was established to modify the highs and the lows. Over the past 40 years, I would say that they have done a reasonable job.

[Topspinmo]

The media is downright giddy that the most recent inflation report indicates the Fed might soon be cutting interest rates. Exactly how is that good news for responsible senior citizens who have saved their hard earned money, avoided debt, and want to earn a reasonable real rate of return above inflation on their savings?

IMO manipulation and Ponzi schemes ever since gold standard was axed for paper money. :loco: yes I know I have weird opinions.. :icon_bored:

[Topspinmo]

Once upon a time the media would just report the news

Not on this planet…:oops:

[Michael G.]

Once upon a time the media would just report the news

They still do but now it's fake. :cus:

[Blueblaze]

Mortgages were over 8% for my entire working life, until the gooberment blew up the economy giving way mortgages to people who refused to pay them back, and the whole thing came crashing down in 2008. Heck, my Grandparent's 20-year, $5,000 mortgage was over 5%! My father's 20-year $18,000 mortgage was 4% (thanks to the Nixon/Carter inflation)! My first home was 18% for a 30-year, $80K mortgage, because that's what it took to fix the Nixon/Carter inflation. And still, my savings NEVER hit 0.01% until 2008. Before 2008, the gooberment was never so cruel as to force me compete with their printing press!

There is NOTHING "normal" about a 3% mortgage or 0.01% passbook savings rate. The passbook savings rate was 4.25% for 100 years prior to 2008. NORMAL is when a bank pays you 4.25% to save your money with them, so they can loan it back out for 8%. But the gooberment's magic money machine makes your savings account a mere nuisance. The bank gets its money direct from the FED, not you.

"Normal" ended in 2008.

[Pugchief]

It's bad news for rich old people only to the extent that they'll have fewer pieces of gold to fill their coffins with when they're buried.

Harsh. Maybe they are concerned about needing expensive in-home care when they are older. Or supporting their unemployed adult children. Or something else.

It's good news for anyone who has debt in any legal institution that charges interest.

It has zero impact on anyone who has neither savings nor debt.

Not true. Unless your investment portfolio is 100% stocks, bond rates and values are very sensitive to interest rates.

[Stu from NYC]

Not on this planet…:oops:

They used to! Now they tell us what they want us to think.

[OrangeBlossomBaby]

Harsh. Maybe they are concerned about needing expensive in-home care when they are older. Or supporting their unemployed adult children. Or something else.



Not true. Unless your investment portfolio is 100% stocks, bond rates and values are very sensitive to interest rates.

Most Americans don't have ANY "investment portfolio." Bond rates and values don't affect them at all. I have stock in one company. Current value is around $6,000. It was worth something like $325 when my grandmother bought it for me. If Intel goes bankrupt I'll be out nothing, since I never invested a dime of my own money into it. I have no pension, no 401K, no IRA, no annuities. Most Americans with a 401k only get to invest a small percentage of their paycheck into a limited list of fund options. Since their contribution is matching, they'll come out ahead no matter what happens to bond rates and values.

[Pugchief]

Most Americans don't have ANY "investment portfolio." Bond rates and values don't affect them at all. I have stock in one company. Current value is around $6,000. It was worth something like $325 when my grandmother bought it for me. If Intel goes bankrupt I'll be out nothing, since I never invested a dime of my own money into it. I have no pension, no 401K, no IRA, no annuities. Most Americans with a 401k only get to invest a small percentage of their paycheck into a limited list of fund options. Since their contribution is matching, they'll come out ahead no matter what happens to bond rates and values.

Except you weren't talking about 'most Americans'. You were talking about wealthy retirees in TV. Who presumably have diversified portfolios including bonds.

Your words: "It's bad news for rich old people only to the extent that they'll have fewer pieces of gold to fill their coffins with when they're buried."

Not investment advice, but you might want to think about diversifying that Intel stock into an S&P 500 fund or something.

[Battlebasset]

When return on CD/Treasuries was above 5%, I moved excess cash into those. When it drops, it's time to invest with the fixed income money I have made. If we go into recession, then I can pick up stocks cheaper.

Yes, I'm only 60 so I have some runway.

[Topspinmo]

When return on CD/Treasuries was above 5%, I moved excess cash into those. When it drops, it's time to invest with the fixed income money I have made. If we go into recession, then I can pick up stocks cheaper.

Yes, I'm only 60 so I have some runway.

Depends on how big airplane is?:shrug:

[Aces4]

Mortgages were over 8% for my entire working life, until the gooberment blew up the economy giving way mortgages to people who refused to pay them back, and the whole thing came crashing down in 2008. Heck, my Grandparent's 20-year, $5,000 mortgage was over 5%! My father's 20-year $18,000 mortgage was 4% (thanks to the Nixon/Carter inflation)! My first home was 18% for a 30-year, $80K mortgage, because that's what it took to fix the Nixon/Carter inflation. And still, my savings NEVER hit 0.01% until 2008. Before 2008, the gooberment was never so cruel as to force me compete with their printing press!

There is NOTHING "normal" about a 3% mortgage or 0.01% passbook savings rate. The passbook savings rate was 4.25% for 100 years prior to 2008. NORMAL is when a bank pays you 4.25% to save your money with them, so they can loan it back out for 8%. But the gooberment's magic money machine makes your savings account a mere nuisance. The bank gets its money direct from the FED, not you.

"Normal" ended in 2008.

You hit the nail on the head. Now everyone needs to get rich in the stock market so prices are super-inflated to feed the masses. It's ridiculous, every medical supply, service and so forth is also super-priced along with everything we touch. And the pyramid scheme goes on and on.

I think if interest rates paid on personal savings accounts tanks again, everyone should pull their money out of banks even if it bites. Let them get their free money from the government for their mortgages and such.

[JRcorvette]

The media is downright giddy that the most recent inflation report indicates the Fed might soon be cutting interest rates. Exactly how is that good news for responsible senior citizens who have saved their hard earned money, avoided debt, and want to earn a reasonable real rate of return above inflation on their savings?

You need to take action now before the rates drop. There are still safe investments out there that will pay you 5%++. But don’t wait too long.

[FloridaGuy66]

I have no pension, no 401K, no IRA, no annuities.

Seems like anyone living in TV in that situation would have to be sitting on a significant stockpile of money just to cover home, food and modest entertainment costs for several decades.

[Switter]

In July, on a new home in TV I got a 30 year rate quote of 7% from Citizens First.
Tuesday I got a rate of 5.875% on a 30 through National Bank of Kansas City (nbkc).
Loan officer claims rate cut has already been built into the market.

I bought last August and I am at 6.875. I didn't know they were already below six. I might still wait, holding out hope they'll go to the low 5%

[Mrfriendly]

When return on CD/Treasuries was above 5%, I moved excess cash into those. When it drops, it's time to invest with the fixed income money I have made. If we go into recession, then I can pick up stocks cheaper.

Yes, I'm only 60 so I have some runway.

With our 2.8% mortgage on Villages home I think I’m good for awhile to keep putting my money into CDs/Treasuries then stocks on the upcoming BIG dip.

[retiredguy123]

Do you think you might be a bit self centered? Lower interest rates might help the younger generations get a mortgage and be given the opportunity that you had when you were their age. Maybe if you had invested better over the years you wouldn't be dependent on your savings account. Does being selfish come to mind?
My advice to young people has always been to avoid debt and to save money. I don't agree that buying a house with a large mortgage is a good idea, or that it necessarily creates wealth. I have a sizable savings account, but I am not dependent on it. I don't think that artificially lowering interest rates to below the inflation rate is a good idea. It encourages borrowing instead of saving. Also, it has nothing to do with being selfish.

[Marine1974]

The media is downright giddy that the most recent inflation report indicates the Fed might soon be cutting interest rates. Exactly how is that good news for responsible senior citizens who have saved their hard earned money, avoided debt, and want to earn a reasonable real rate of return above inflation on their savings?
The federal reserve is not a branch of our government. Its board members are all from big banks . I truely believe the fed should not be involved in setting interest rates . Supply and demand should determine interest rates . Let banks compete for our money .

[rsmurano]

People talk about savers like they are putting their money under their mattress or at a bank savings account. You should never have a savings account because you will never make any money. You should be in the market with all your money. Create a bucket system to live on but even have your bucket that your living on invested in money market, everything else in stocks/funds.
Realistically, by the time you retire, you shouldn’t have any debt, enough $$$ to live on without any worries, and if you don’t, you didn’t plan well when you were younger and working. If you would have invested $100 a month say in ibm or in apple in your 20’s, you would have enough money to do whatever you want now. You would have over $1M in wealth. If you would have increased this amount each time you got a raise or got a better paying job, you would have much more. But people didn’t, most spent as much as they made.

As for interest rates, we all benefit, especially investors over time. The last decade before 2021 is proof of that. Interest rates drop tech stocks and small caps will surge, in time, and all the people with variable interest rates will benefit. Home prices will skyrocket because you are going to have a lot more people that now can afford the home they have always wanted so it will be a sellers market. Lately with the higher rates, it’s been a buyers market.

[Stu from NYC]

People talk about savers like they are putting their money under their mattress or at a bank savings account. You should never have a savings account because you will never make any money. You should be in the market with all your money. Create a bucket system to live on but even have your bucket that your living on invested in money market, everything else in stocks/funds.
Realistically, by the time you retire, you shouldn’t have any debt, enough $$$ to live on without any worries, and if you don’t, you didn’t plan well when you were younger and working. If you would have invested $100 a month say in ibm or in apple in your 20’s, you would have enough money to do whatever you want now. You would have over $1M in wealth. If you would have increased this amount each time you got a raise or got a better paying job, you would have much more. But people didn’t, most spent as much as they made.

As for interest rates, we all benefit, especially investors over time. The last decade before 2021 is proof of that. Interest rates drop tech stocks and small caps will surge, in time, and all the people with variable interest rates will benefit. Home prices will skyrocket because you are going to have a lot more people that now can afford the home they have always wanted so it will be a sellers market. Lately with the higher rates, it’s been a buyers market.

Agree with you. The problem is people do not have to take a required class in economics and financial management. As a result too many people will lose out on being financially responsible.

[sianagers@att.net]

In July, on a new home in TV I got a 30 year rate quote of 7% from Citizens First.
Tuesday I got a rate of 5.875% on a 30 through National Bank of Kansas City (nbkc).
Loan officer claims rate cut has already been built into the market.

Can you help me find them ???

[jimjamuser]

Without a major recession, I doubt that interest rates will drop significantly. The treasury will still need to borrow money to fund the massive budget deficit.
The budget deficit would be improved if the income brackets were adjusted back to help the middle class.

[jimjamuser]

Raise rates, and the economy crashes.
Cut rates and the dollar crashes.
Pick your poison.
That explains why the FED must work hard to KEEP rates correct as much as possible.

[jimjamuser]

Mortgages were over 8% for my entire working life, until the gooberment blew up the economy giving way mortgages to people who refused to pay them back, and the whole thing came crashing down in 2008. Heck, my Grandparent's 20-year, $5,000 mortgage was over 5%! My father's 20-year $18,000 mortgage was 4% (thanks to the Nixon/Carter inflation)! My first home was 18% for a 30-year, $80K mortgage, because that's what it took to fix the Nixon/Carter inflation. And still, my savings NEVER hit 0.01% until 2008. Before 2008, the gooberment was never so cruel as to force me compete with their printing press!

There is NOTHING "normal" about a 3% mortgage or 0.01% passbook savings rate. The passbook savings rate was 4.25% for 100 years prior to 2008. NORMAL is when a bank pays you 4.25% to save your money with them, so they can loan it back out for 8%. But the gooberment's magic money machine makes your savings account a mere nuisance. The bank gets its money direct from the FED, not you.

"Normal" ended in 2008.
A 3% mortgage could be "normal" when the inflation rate is ZERO percent.

[Blueblaze]

A 3% mortgage could be "normal" when the inflation rate is ZERO percent.

Even during the Depression, when the money was DEFLATING, mortgage interest rates never hit 3%.

Nobody in their right mind -- and certainly not a bank -- would voluntarily create a business around a 3% profit that requires a 20 year risk. You need government dumbassitude to create that level of lunacy.

What's really asinine is that right now, for the first time in human history, it is actually possible to create 0% inflation and a stable economy. All it would take would be to take the creation of money out of human hands and write a computer program that in real time matches the money supply to the growth of the GDP. We will never in our grandchildren's lifetimes see such sane management of the economy.

As long as a politician has something to gain from it, there will always be a knob on the Magic Money Machine that can be turned up to "11", just in time for the next election..

[MorTech]

I doubt they will ever allow savings rates higher than inflation...They want you to spend and risk investment (Like SPY ETF up 20% YTD). Wall Street wants zero-bound so they can have higher asset inflation. They use inflation as a way to default on debt.

[allsport]

Well said.

[Haggar]

They still do but now it's fake. :cus:

Is it the the reporting that is fake or is it the stories they report on that are fake?

If the stories are fake do they report it as a unsubstantiated story or they do they push it as fact.

It is my belief most reporters are honest and they report or repeat what the story is.

If they report a "story" they should report along it with the facts.

Some people don't like the facts - they prefer the story.

[sianagers@att.net]

In July, on a new home in TV I got a 30 year rate quote of 7% from Citizens First.
Tuesday I got a rate of 5.875% on a 30 through National Bank of Kansas City (nbkc).
Loan officer claims rate cut has already been built into the market.

I just applied with them today!! Thank you for the referral!!!

[Normal]

A quarter point won’t do anything except create some ease and display some stability. It isn’t the end of banks paying decent interest rates and it won’t change loan markets too much.

[CoachKandSportsguy]

Is it the the reporting that is fake or is it the stories they report on that are fake?

not sure to exactly what you are referring, but as far as the BLS, Bureau of Labor statistics is concerned, their data is what the FR makes its decisions, but the data has many obvious flaws, and changes downwards to slow the reference rate of annual increases, such as to seniors and other contractual payments over time.


So fake is a hyperbolic description, but for financial data, I would say well documented flawed and inaccurate. The most glaring is the recent change in the calculation of the inflationary rate of insurance, which when restated, reported that the cost of insurance went down year over year in a huge way. . .

And the birth death rate adjustment in labor force participation is an assumption to explain the assumption of the unreported, which also causes issues when all else is stable. . .

good luck

[tophcfa]

not sure to exactly what you are referring, but as far as the BLS, Bureau of Labor statistics is concerned, their data is what the FR makes its decisions, but the data has many obvious flaws, and changes downwards to slow the reference rate of annual increases, such as to seniors and other contractual payments over time.


So fake is a hyperbolic description, but for financial data, I would say well documented flawed and inaccurate. The most glaring is the recent change in the calculation of the inflationary rate of insurance, which when restated, reported that the cost of insurance went down year over year in a huge way. . .

And the birth death rate adjustment in labor force participation is an assumption to explain the assumption of the unreported, which also causes issues when all else is stable. . .

good luck

Good post, note fake, but manipulated and massaged to report a flawed and inaccurate statistic that fits the agenda of the entity reporting the statistic. Since the entity compiling and reporting the statistic has an obvious conflict of interest, it would be nice if an independent and objective third party was assigned the responsibility. Unfortunately, that’s not going to happen.

[CoachKandSportsguy]

Good post, note fake, but manipulated and massaged to report a flawed and inaccurate statistic that fits the agenda of the entity reporting the statistic. Since the entity compiling and reporting the statistic has an obvious conflict of interest, it would be nice if an independent and objective third party was assigned the responsibility. Unfortunately, that’s not going to happen.

there is a competing site called "Truflation" which attempts to more accurately represent inflation . .

[kkingston57]

Yes, 40% of Americans DO NOT have $400.00 in their “cookie jar” when they need it. Can you imagine? That is roughly 134,000,000 Americans.

Have a hard time believing that statistic(have heard it numerous times)

[MorTech]

Truflation is the only data I even remotely trust.

S&P tracks M2 money supply...Until just recently.

If I could borrow $1M @ 6% and buy SPY/QQQ...Then debt is a good thing.

Selling your labor for money is like throwing away your life in an unbacked fiat currency world. You will be ground down between the tri-millstones of taxes, inflation and mandated insurance. Most Americans do better than inflation by buying desirable real estate.

[Bay Kid]

Every now and then the major media stations will tell you anything so you will believe all is well or getting better.