FOMC Chairman Powell answers a reporter’s question at the press conference.
You may have heard three cheers from Wall St. recently when JPMorgan Chase & Co. announced its “highest-ever quarterly profit.” The bank, America’s largest at the moment, got an extra boost by recognizing that some loans it had previously written off were actually going to pay. Good for the bank, right? Sure, but to make it happen the Fed is holding interest rates at nearly zero and sacrificing savers and retirees to save big banks.
There are no plans to change course or to have banks share in the pain being suffered by America’s savers and retirees. The NY Times reported this morning that Fed Chairman Jerome Powell plans on holding interest rates low for a long time. Jeanna Smialek reports:
With the incoming Biden administration pushing for more economic stimulus and with multiple coronavirus vaccines already approved, some investors have been wondering whether the Federal Reserve might soon start to ease off its support for the economy.
Jerome H. Powell, the central bank’s chair, made it clear on Thursday that the central bank would be cautious in doing so — and that action was anything but imminent. During a webcast question-and-answer session, Mr. Powell said it would take time for the economy to recover from the pain of the pandemic era.
“When the time comes to raise interest rates, we will certainly do that,” he said. “And that time, by the way, is no time soon.”
Action Line: In times like these, you need to pay attention to what the Fed is doing to your potential for investment income. If you don’t have good advice about bonds and equities, you’ll invest, but they’ll win.
Originally posted on Your Survival Guy.
