The Federal Reserve says the economy’s weakening. That isn’t good news for bank rate investors.
Tuesday, the Fed’s Open Market Committee announced that it would keep its key federal funds interest rate at 0% to 0.25% — a signal the economic recovery is still on hold. The Fed will also start buying up government bonds in an effort to ease credit rates on corporate loans, a move that would hopefully spur borrowing and spending.
Unfortunately, a big move by the Federal Reserve into the bond market could have the effect of driving bank rates even lower. That’s because the buying spree would likely drive the price of U.S. Treasury notes higher and yields lower.
"Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months," the Fed’s Open Markets Committee said in a statement.
That wasn’t exactly what bank investors (or any investors) wanted to hear from the Federal Reserve after the government rolled out its “Recovery Summer” public relations campaign in June.But despite the bad news, some banks are still pulling out the stops on rate deals. We dug them up for you in this week’s edition of Deals of the Week.