Are Big Banks Interested in Your Savings Account? The Fed Funds rate has been up for a while now and many banks, especially online banks, offer 4% APY on their accounts. Why is it that the national average for savings right now is at 0.45%? The big banks I have accounts with are all at 0.1% or less. Larger banks know that most people are pretty lazy with their money as it is a hassle to open and close new accounts, but they have given better rates to large corporate customers, or cash bonuses for folks setting up automatic deposits in hopes of benefiting from a longer-term relationship.
Mortgage Rates – mortgage rates improved marginally over the last week as the price of Mortgaged Backed securities continued their steady decline. Rates are down approximately 0.625% from this time last year.
Inflation – the Producer Price Index which measures wholesale (producer) inflation rose 0.1% in July and is up 2.2% year over year. This is down from last month’s year over year figure of 2.7%. The Core rate, which strips out food and energy, increased 0% in July and is up 2.4% year over year, a big moderation from last month’s reading of 3%
The Consumer Price Index showed that overall inflation rose 0.155% in July and is up 2.9% year over year – a moderation from last month’s number of 3%. The Core Rate, which strips out food and energy increased by 0.16% and is up 3.2% year over year.
Retail Sales – the Census Bureau showed retail sales rose 1% in July. When you strip out auto and gas sales were still up 0.4% The Core reading rose 0.3% which is used for the GDP report. This is a moderation from June’s reading of 0.9% increase but still higher than some estimates.
New Construction – the National Association of Home Builders (NAHB), released their Housing market Index which measures builder confidence. It fell two points to 39, the lowest level since December. Any number below 50 shows contraction. While traffic (25) and Sales (44) are down, future expectations increased by one point from the previous report to 49 due to data showing likelihood of a rate cut in September.
Mortgage Applications to purchase homes increased by 3% last week and are now down 8% year over year. Refinance applications jumped 25% last week and are now making up 50% of applications.