- Federal Reserve Chairman: is the head of the central banking system of the United States.The chairman is the "active executive officer of the Board of Governors of the Federal Reserve System.
- Certificates of Deposit: or CD is a time deposit, a financial product commonly offered to consumers by banks, thrift institutions, and credit unions.
- credit markets: also known as the debt, fixed income, or bond market is a financial market where participants buy and sell debt securities, usually in the form of bonds
This article is explaining why interest rates are so low. And that is because since the financial crisis hit in 2008 the credit markets froze up leading the federal reserve to significantly lower interest, in order to bolster the economy. This was especially intended to help in the department of housing sales. Providing lenders with a low pay back rate. Unfortunately this plan does present a downside. Savers who are purchasing CD's. They are current earning an average of 1.5% interest, or 3% interest on an investment of 5 years. This is causing investors to feel cheated. However the author of this article predicts that interest rates will jump up next year.
I predict that interest rates aren't going to rise enough next year for investors to be pleased. Also I think that the stock market is going to begin to gain a lot more activity from all these investors who are unhappy with the productivity of their money in the credit market.
No comments:
Post a Comment