Looking for your opinion: When will interest rates increase?

[Christian321]

Do you believe savings/CD account interest rates will increase sometime soon? How long before we start seeing 3-5% savings accounts/CD rates again?

I hate dealing with the risk associated with the stock market, but at these current ridiculously low interest rates, I am starting to think that it is worth taking the risk in the market.

[bjl584]

I'd guess at least another year and a half before rates go up. When they do, they could go up fast, but I'm not going to try to predict the future. The Fed is pretty much broadcasting to the world that rates will remain low till sometime on 2013 and maybe longer, so I'm going by that.

[97guns]

The Fed Can Not Raise Rates - It Would Be Suicide

[YLTL_Dan]

Part of me thinks we're headed the way of Japan where rates have been under 1% since 1995... but they are a lot more proficient at savings than we are so it's hard to say. Either way, I'm not banking on increased rates for a while.

[GrimJack]

My credit union pays 6% but only on the first $500 each in savings checking - this is where I am stashing my Argentina money.

[UnknownXV]

If rates go up, debts owed go up. The government would cry themselves to sleep if the rates hit 3-5%. So would we.

Raising interest rates when our debt is at 16 trillion dollars is pure suicide, especially when you look at the deficit. Our entire debt could be wiped out and we'd be back up to the same level in 10 years. It's utterly ridiculous.

[Wino]

I don't think that rising rates are necessarily suicide. The Government can print money until it is genuinely worthless, then pay off $16T with today's equivalent of $12.95, for instance. Of course, the entire economy would collapse, but I'm not so sure that the Federal Government (ANY of them) could give a rat's tail, as long as they get re-elected.

So, raising rates along with extreme inflation (remember Jimmy the Peanut) won't necessarily derail the government due to its debt level.

[UnknownXV]

Well I meant it would be suicide for us to desire it right now.

I know the government and "Federal" reserve don't care. Even in hyper inflationary terms, they still have enough money for a lifetime. They don't care. Nothing will changed or be fixed because it's all about getting elected again. To fix things requires long term decisions that in the short term make things worse. That doesn't look good on you.

Maybe I am cynical, but the root problem isn't the politicians, but the people who are so short sighted and ignorant of the serious fiscal issues we face.

[Snodog]

The rates will go up when we worry more about unemployment than the deficit. Rates normally go up when the economy heats up so you should actually not be fearing a rate increase but instead looking forward to it.

When will the economy heat up? Hopefully in my lifetime?? We are slowly turning Japanese.

[snafu]

Most governments try to slowly raise rates when inflation takes hold. It's a lever to cool down the economy. The gov't owes $16 Trillion [I can't get my head around such a huge number] and it would cost a lot more to have higher interest rates. I've been listening to the political speeches during the GOP Political Convention in Fl. The theme I hear is the determination to decrease taxes for the well to do and reduce benefits for those most vulnerable. They say improve education but cut government/teacher jobs. Does the Gov from NJ believe his bombastic rhetoric? Is he for real? What's his track record improving the economy in NJ? Mrs. R didn't sell me with her story no matter how many times the media calls it 'blockbuster.' I wish they'd tell us who the writers were early on. We always hear about who wrote what... 4 years later.

Each of the speakers offered up the story of their grandfather who immigrated to USA followed by their determination to deport immigrants. Jeb Bush is talking just now. I wish he'd explain how much debt was added by two, concurrent wars, billions to bankers, and the financial nightmare his bro left behind.

[Wino]

I've been listening to the political speeches during the GOP Political Convention in Fl. The theme I hear is the determination to decrease taxes for the well to do and reduce benefits for those most vulnerable. They say improve education but cut government/teacher jobs. Does the Gov from NJ believe his bombastic rhetoric? Is he for real? What's his track record improving the economy in NJ?
(snip)

Each of the speakers offered up the story of their grandfather who immigrated to USA followed by their determination to deport immigrants. Jeb Bush is talking just now. I wish he'd explain how much debt was added by two, concurrent wars, billions to bankers, and the financial nightmare his bro left behind.

Yet you let the crony-paying arse in office now off the hook? At least we got a free people in Iraq for the wars. What did we get for paying off Obama's campaign contributors? A bankrupt "green energy" industry? Fully funded union pensions for workers in a car company that is going bankrupt again, anyway? Insurance and banking executives who retired with golden parachutes from firms that tanked?

What a myopic and twisted view you have! We haven't had a fiscally-competent president in 24 years now. Reagan, the one irrationally hated by the left, was the last president we had that forced Congress to do something. If only he had insisted instead that "$2 in spending cuts, THEN I'll give you $1 in tax increases." You conveniently FORGET that Congress (a democrat-controlled Congress) STILL OWES US $2 in spending cuts for every dollar of tax increases.

This time, though, I say, "Cut the budget first."

And I could care less where the cuts are. No cuts? No tax increase.

You're just another partisan. I got into this same argument on a right-wing site earlier this week, from the other side, and they now call me "liberal" as if it is some argument for their side. Well, you're just as bad as they are for throwing out talking points that DO NOTHING TO HELP THE ECONOMY.

And that's what is needed: More growth by LIMITING GOVERNMENT INTERVENTION and CUT GOVERNMENT SPENDING.

Where and how do we limit or cut it? Get rid of the EPA. Get rid of the Dept of Education. Get rid of 90% of the Dept of Agriculture. Limit government charity programs to make welfare in its 200 forms down to one check for SUBSISTENCE-level survival, and not a "porch sitting obesity program for lazy people." Cut the military back to protecting our borders and quit paying to protect all of western culture. Cut out ALL foreign aid altogether; they hate us anyway, so let them protect their own socialist plans with their own blood and money. Eliminate the IRS completely and go to a point-of-sale tax system (already in place in any State with a sale's tax); this frees up all "corporate welfare" completely. Cut out "government education grants;" if someone should be going to college for free, they'll get a scholarship. And lastly, yes, phase back until you can cut out medicare, medicaid (already gutted above with "subsistence" assistance), and all the other medical retirement plans; these last two will force tuitions down and medical care costs down, due to the fact folks will actually have to PAY for the treatment or classes themselves, so won't use as much or will negotiate the prices themselves.

There's a LOT of fat in a $3 Trillion (or whatever they're wasting this year) budget. I'm sure most people will find fault with some or all of my cuts above. If you aren't willing to cut everywhere, and deeply, then you're part of the problem. And everyone like you is the rest of the problem. The symptom is government spending. The cause is people not wanting their personal piece of government cheese to go away.

[jIM_Ohio]

The sooner the interest rates go up, the better

This will lower price of imports, like oil
This should encourage foreign investment into US companies
This should help any company which does business in the USA.

[UnknownXV]

If interest rates increase even by just 1%, the amount of money we'd have to borrow over what we already are to pay the interest on our pile of debt would be gargantuan. We'd easily break into the 2 trillion annual deficit mark. It just can't be sustained.

Our debt is a massive ball and chain holding us down.

[greenskeeper]

Just print up a few of these....

[4sureloans]

Looking for your opinion: When will interest rates increase?

Locking into a safe but low-yielding CD might seem prudent now. But a five-year CD yielding 2 percent or 3 percent might not look so great if interest rates rise sooner than expected, as some experts predict.