Bernanke and the rest of the Federal Reserve are expected to lower interest rates by 25 basis points (0.25%) this Wednesday to 2.00%.Most experts speculate that after this Wednesday’s cut, Bernanke will keep rates unchanged for the next few months.
This is a tough situation for those looking to open a certificate of deposit account. Rates are so low right now that it is unfavorable to lock these rates in for the long term. Instead, a better choice may be to stash money away in liquid money market & savings accounts, which currently average better returns (APY) than CDs (according to Bankrate national data).
Regardless of whether you open a CD or a money market, the current unfavorable economy makes it very difficult to beat inflation. Low interest rates, record oil prices (almost $120 / barrel), and food shortages are going to make it more expensive for you to maintain your standard of living.
Are you interested in how the Federal Reserve works? Watch the video below to learn!
