Federal Reserve raised interest rates (.25%) Wednesday for the first time in three years,

Stinks for my high beta fun portfolio, but this has been needed for a while now

I assume all banks have already immediately raised loan rates, but will take another week or so to raise interest earned rates. The reverse would be true if the Fed dropped interest rates. Am I right?

Update: I did an AI search.

The following practice by banks should be criminal price gouging.......

Do banks immediately raise new loan rates and wait a week or so to raise interest earned rates after the Fed raises rates?

AI response......

Yes, banks generally raise new variable loan rates (like the prime rate) almost immediately—often within a day—while taking days, weeks, or even months to raise interest rates paid on savings and deposits.

How Loan Rates Respond
Immediate Prime Hike: Major banks typically raise their prime lending rate within 24 hours of the Federal Reserve announcing a benchmark rate increase.

Direct Impact: Variable-rate loans, credit cards, and lines of credit tied to the prime rate automatically adjust in the next billing cycle or almost immediately.

Fixed Loans: Fixed-rate loans do not change, but new fixed-rate offers adjust rapidly based on broader market expectations and Treasury yields.

How Savings Rates Respond
Delayed Repricing: Banks are much slower to increase Annual Percentage Yields (APYs) on savings accounts, money markets, and certificates of deposit (CDs).

Online vs. Traditional: Online banks and credit unions may adjust deposit yields within one to three weeks to compete for cash, whereas large traditional brick-and-mortar banks can take up to two months—or might not raise them at all.

Asymmetric Speed:
Industry analysts describe deposit pricing as taking "the stairs up and the elevator down," meaning banks eagerly widen their profit margins by keeping saver rates low for as long as market conditions allow.

Yeah it has taken a bit off but if we’re headed for 5% rates, PE ratios are too high.

Covid was expensive.

are we great again yet?

quote:

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Just got notified my savings account rate is going up .25% APY

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That's awesome. Hopefully, it gets the ball rolling for other banks to raise their savings rates asap. For the most part they typically drag their feet in unison to widen their profit margins as long as competition allows them to.

he has no idea how international trade works or is measured nor has he any clue as to what the federal reserve does or why

His language was decidedly hawkish today. Or do you mean clarity in terms of what data he plans to value etc? I’d agree that he doesn’t go into details in that regard.

Yeah, this will cut some growth but needed. Rates artificially low for too long. DC is spending it like it’s stolen.

AI trade I feel is still good long term as it’ll help boost productivity as well as GDP. AI gets a lot of negative noise but it’s an arms race US has to win. A lot of fear mongers the last 2 weeks but we’ve gotten used to that. Then earning season calms the Nellie’s.

Also midterm elections with a lot of negative chatter will also hamper sentiment but after that we should pick up for end of year.