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Deposit Rates Say, Fed Cut Rates

The Fed will not lower the Fed Funds Rate until 2020.
Read the following Moebs’ Research Release and find out why.
No one has ever look at Fed rate decisions using deposits. We included even Walmart and the Fintechs along with banks, thrifts and credit unions.

Forget about Stocks & Bonds – Deposits Hold the Key to Fed’s Move
Lake Forest, IL (June 17, 2019) There is almost $11 Trillion in insured domestic deposits. For the first quarter of 2019 the total interest paid on deposits at banks, thrifts, credit unions and Fintechs was 0.79%. This is up 8 basis points since the 4thquarter of 2018.
Fed Funds are trading at 2.37%.
Savers are willing to forgo 1.19% of interest for deposit insurance.
So, 2.37% - 1.19% - 0.79% = 0.40% Gap, or Fed Gap.
Michael Moebs, Economist & CEO of Moebs Services, an economic research firm, says, “Deposits are the driver for the Fed to decide whether to cut the Fed Funds Rate or hold off. Our Interest Rate Study shows a 40 BP gap. This was over a 50 BP gap when the Fed in September 2018 and December 2018 decided to increase the Fed Funds rate twice by 25 BPs. The deposit marketplace is telling the Fed they overpriced money.” Read Full Article

Written By: m.moebs
Date Posted: 6/17/2019
Number of Views: 551