Freshly squeezed: Savers already feeling the pain ahead of likely start to Fed rate cuts
This week the Federal Reserve is likely to cut its main interest rate for the first time in more than four years
NEW YORK (AP) — This week the Federal Reserve is likely to cut its main interest rate for the first time in more than four years. It's a momentous move, but savers have been feeling the squeeze for months.
Financial markets and banks try to get ahead of such moves by the Fed, and yields have been dropping on everything from bonds to savings accounts as a result.
Consider a 10-year Treasury note, which holds a central position in many savers' portfolios because of its safety. Early this week, anyone buying a 10-year note could get a yield of 3.70%. In late April, they could have gotten a full percentage point more, 4.70%.
Or, for people who feel they don't have enough cash for a portfolio, consider savings accounts at banks. The national deposit rate averaged 0.46%, according to the Federal Deposit Insurance Corp. That's down from 0.47% in March. Of course, yields much higher than that are still available at online-only and other accounts, including several yielding more than 4%. But even there, yields have dropped in anticipation of a Fed cut.
