Jun 13, 2018|
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Stay on top of breaking financial news by becoming a member of the carries brigade. Log on to financial exchange does come in sign up today. Greg McBride from Bankrate dot com joins us now here to talk about the pending decision from the Federal Reserve coming leaders today Greg thank you for joining us. Thanks for having me back pressure Greg so were were over 90% that the the Fed is going to hike today relates to be close to a 100% it seems like. I wanna talk a little bit about how this is actually filtering down on on the personal level. What is what are we seeing in terms of saving yours rates nationally. As the Fed is hiked over the last year and a half. It really depends on where you look I don't a lot of the biggest banks. Are barred still very stingy with their payout if they've increased what they're paying out savings account. See these at all it's been nothing more than a token increase. But it's a vastly different story if you are shopping around if you look at it smaller community banks credit unions on line banks. That's very important substantive improvement atop the building. Savings accounts that are available nationwide which we post them Bankrate dot com. That's almost double. And the Fed started to boost rates it was one point 1%. Back in late twenties misty when that that started this and now here we are on the cost of the seventh rate hike. At a top getting out as little over 2% and those will continue to climb as the that is active so it's just. You know you'd have to shop around and expect it you aren't that you walk benefiting from. They continued increases in interest rates and that you know that carry forward but if you're sitting back waiting for it become do you. There's still waiting in your gonna be waiting awhile longer very. And I will say I do you checked your site just about once a week just to kind of see what's out there and see if I'm missing out on anything suits of really good resource there what about things like credit card interest rates and now home equity lines to those bump up immediately after the Fed hikes today. Trading quick I mean you'll see that higher rate typically within one to Tuesday that cycle so. The pink collar sixty days you will see that higher rate reflected in your camp for both the credit cards and home equity lines. A credit card the only average credit card rates are already at a record high. And they're gonna continue to go up so you know that's one that I think really. Warrants attention grab one of those 0% or other low rate battles transfer offers is still out there I used that as. Period timer you can insulate yourself. From rising interest cost that really make hay to get that it paid off once and for all because it but it cost it's only escalating it on the home equity front. And the profile of that tennis changed a lot because not only are interest rates going up and they keep ratcheting higher but you also lost the tax deduction in a lot of cases and yet so failure that cost of that debt. Easily double what it was you know 2050 template that certain rate very. Gregory got the Producer Price Index coming out came out this morning rather. And the overall index now over the last twelve months showing inflation of three point 1% stripping out food and fuel. We see it's still a two point 6% both of those accelerating from a year ago pretty significantly. How does that affect your projection on where rates are going this year. Well I think inflation is really the watchword of fed policy I think it's really going to be the key ingredient that determines. You know it's defective paint and continue to move at a gradual pace if I have to. Stepped things up and be more aggressive. And you know you stated that they PPI which you know that's no fluke yesterday we got the Consumer Price Index. And it's so much the same thing the headline number was at two point 8% which is a six year high in the court number also well over the 2% mark so the out. Is it one sense but that is correct you know they were competent replacement got a good close of the 2%. OK they're right about that but I think you know what they may have on their hands down over the course the next six to twelve months is making sure it doesn't get too much above that 2%. Tolerate very good we appreciate the time Greg Avago one. Trap that is Greg McBride from Bankrate dot com. You know what's curious is you have these this inflation I think a lot of this inflation is coming. Due to. Improved confidence I I I think people if your business owner. Your more confident today the pride in for ten years well it is we got to it was yesterday. A small business activity at that it might be news small business confidence index that came out and I'll show you the chart on this just a pull it up right now. Yes you were ago. 34%. Of small businesses say that now is a good time to expand at 34% doesn't sound like a huge number. To put this in perspective. For the period from about 2007. Through 2014. We never got above 10% yeah okay the last peaks that we saw in the in the dot com mobile to give you an idea in the dotcom bubble. Small business optimism peaked at about 25% saying this was a good time to expand during the 0406. Appear written about 25% again said this was a good time to expand so businesses now are the most optimistic that they have been in the last 28 years and banks are finally in a position where they can actually comedy does business owners with wolves the problem is there aren't enough workers to go around and those that's not classy problem and how well it is except it leads to this inflation. I hit and and I'm OK with that I like if it's wage inflation. I I think that's very health it's not demand driven though it's not just people need more goods and you need more services and and we can't do that.