Home › Forums › Financial Markets/Economics › “Easy” question about interest rates
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CA renter.
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August 21, 2008 at 5:38 PM #259817August 22, 2008 at 12:01 PM #260076
poorgradstudent
ParticipantYeah, I was a kid in the 80s, and I remember having a savings account and making a ridiculous rate compared to what I’ve seen in my adulthood.
It’s unfortunate that the political climate makes it virtually impossible to follow the rational path regarding interest rates and home prices. Hopefully the effects won’t be too catastrophic.
August 22, 2008 at 12:01 PM #260274ParticipantYeah, I was a kid in the 80s, and I remember having a savings account and making a ridiculous rate compared to what I’ve seen in my adulthood.
It’s unfortunate that the political climate makes it virtually impossible to follow the rational path regarding interest rates and home prices. Hopefully the effects won’t be too catastrophic.
August 22, 2008 at 12:01 PM #260285ParticipantYeah, I was a kid in the 80s, and I remember having a savings account and making a ridiculous rate compared to what I’ve seen in my adulthood.
It’s unfortunate that the political climate makes it virtually impossible to follow the rational path regarding interest rates and home prices. Hopefully the effects won’t be too catastrophic.
August 22, 2008 at 12:01 PM #260333ParticipantYeah, I was a kid in the 80s, and I remember having a savings account and making a ridiculous rate compared to what I’ve seen in my adulthood.
It’s unfortunate that the political climate makes it virtually impossible to follow the rational path regarding interest rates and home prices. Hopefully the effects won’t be too catastrophic.
August 22, 2008 at 12:01 PM #260372ParticipantYeah, I was a kid in the 80s, and I remember having a savings account and making a ridiculous rate compared to what I’ve seen in my adulthood.
It’s unfortunate that the political climate makes it virtually impossible to follow the rational path regarding interest rates and home prices. Hopefully the effects won’t be too catastrophic.
August 22, 2008 at 2:27 PM #260146
barnaby33ParticipantYou are confusing a bunch of things. Desire for credit and demand for credit for one. Inflation and price increases are another.
I may want a million dollar loan, but qualifying for one is another thing.
Prices increase for all sorts of reasons, inflation is one of them. Ask yourself this. If we really are having inflation, why is the central bank fighting deflation? Why is the US dollar strengthening against other currencies?
August 22, 2008 at 2:27 PM #260344barnaby33ParticipantYou are confusing a bunch of things. Desire for credit and demand for credit for one. Inflation and price increases are another.
I may want a million dollar loan, but qualifying for one is another thing.
Prices increase for all sorts of reasons, inflation is one of them. Ask yourself this. If we really are having inflation, why is the central bank fighting deflation? Why is the US dollar strengthening against other currencies?
August 22, 2008 at 2:27 PM #260355barnaby33ParticipantYou are confusing a bunch of things. Desire for credit and demand for credit for one. Inflation and price increases are another.
I may want a million dollar loan, but qualifying for one is another thing.
Prices increase for all sorts of reasons, inflation is one of them. Ask yourself this. If we really are having inflation, why is the central bank fighting deflation? Why is the US dollar strengthening against other currencies?
August 22, 2008 at 2:27 PM #260443barnaby33ParticipantYou are confusing a bunch of things. Desire for credit and demand for credit for one. Inflation and price increases are another.
I may want a million dollar loan, but qualifying for one is another thing.
Prices increase for all sorts of reasons, inflation is one of them. Ask yourself this. If we really are having inflation, why is the central bank fighting deflation? Why is the US dollar strengthening against other currencies?
August 22, 2008 at 2:27 PM #260403barnaby33ParticipantYou are confusing a bunch of things. Desire for credit and demand for credit for one. Inflation and price increases are another.
I may want a million dollar loan, but qualifying for one is another thing.
Prices increase for all sorts of reasons, inflation is one of them. Ask yourself this. If we really are having inflation, why is the central bank fighting deflation? Why is the US dollar strengthening against other currencies?
August 22, 2008 at 2:54 PM #260166Eugene
ParticipantLike others said – credit crunch means that banks are less eager to lend, their demand for your money is lower. Lower federal funds rate means lower “prime rate”, and many kinds of loans are tied to the prime rate (credit cards, auto loans, HELOCs). Banks get poorer returns on those loans they do make, so they have to lower yields on savings accounts and CDs.
On the other hand, savings rate is up. People are not spending their money as freely, even large chunks of stimulus checks end up in savings accounts.
August 22, 2008 at 2:54 PM #260463ParticipantLike others said – credit crunch means that banks are less eager to lend, their demand for your money is lower. Lower federal funds rate means lower “prime rate”, and many kinds of loans are tied to the prime rate (credit cards, auto loans, HELOCs). Banks get poorer returns on those loans they do make, so they have to lower yields on savings accounts and CDs.
On the other hand, savings rate is up. People are not spending their money as freely, even large chunks of stimulus checks end up in savings accounts.
August 22, 2008 at 2:54 PM #260423ParticipantLike others said – credit crunch means that banks are less eager to lend, their demand for your money is lower. Lower federal funds rate means lower “prime rate”, and many kinds of loans are tied to the prime rate (credit cards, auto loans, HELOCs). Banks get poorer returns on those loans they do make, so they have to lower yields on savings accounts and CDs.
On the other hand, savings rate is up. People are not spending their money as freely, even large chunks of stimulus checks end up in savings accounts.
August 22, 2008 at 2:54 PM #260375ParticipantLike others said – credit crunch means that banks are less eager to lend, their demand for your money is lower. Lower federal funds rate means lower “prime rate”, and many kinds of loans are tied to the prime rate (credit cards, auto loans, HELOCs). Banks get poorer returns on those loans they do make, so they have to lower yields on savings accounts and CDs.
On the other hand, savings rate is up. People are not spending their money as freely, even large chunks of stimulus checks end up in savings accounts.
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