Before we go into the Deals of the Week, I’d like to give a quick word on the economy as it relates to bank rates.
The latest news comes from the Federal Reserve’s Beige Book, which says that while the U.S. economy is indeed growing, it’s at a much slower pace than other post-recession periods.
Prepared by the Federal Reserve Bank of San Francisco, the Sept. 8 release of the beige book is a veritable “good news-bad news” offering. On the upside, consumer spending is up, even as consumers remain cautious and focus on “non-expensive items.” Manufacturing is also up, albeit slightly, although the pace of growth varied in different parts of the country, with the Boston and Cleveland areas showing the highest growth, and Atlanta and Chicago among the regions reporting the lowest growth.
But home sales and demand for commercial real estate remain down, the Beige Book reports, impacted by the end of the new homebuyer tax credit on the housing front, and continuing tough conditions for businesses on the commercial real estate side.A tepid recovery will likely keep bank rates low, especially if the economy absorbs any further bad news. Stock market investors are skittish enough these days, and any piece of negative news could result in a stampede into the bond markets. That heightened demand for safety would likely tamp bank rates down, as the Fed would surely keep interest rates low and banks wouldn’t have to hike their deposit rates with so much business walking through their front doors.
So for now, it’s more of the same – low bank rates until good news appears.