The Federal Reserve has been raising benchmark borrowing rates at the fastest pace in decades, but the interest rate paid out to millions of people with bank accounts is still stuck at almost zero. According to data from Bankrate, the average interest rate on savings accounts is just 0.23%. So what's going on? Why have many banks so far avoided raising what they pay out to depositors even as the Fed hikes, and will that eventually change? What does it mean for the financial system and also economic policy given that higher rates are, in theory, supposed to encourage less spending and more saving in order to curb higher inflation? On this episode, we dig deep into the making of bank deposit rates with Barclays strategist Joe Abate.

The Federal Reserve has been raising benchmark borrowing rates at the fastest pace in decades, but the interest rate paid out to millions of people with bank accounts is still stuck at almost zero. According to data from Bankrate, the average interest rate on savings accounts is just 0.23%. So what's going on? Why have many banks so far avoided raising what they pay out to depositors even as the Fed hikes, and will that eventually change? What does it mean for the financial system and also economic policy given that higher rates are, in theory, supposed to encourage less spending and more saving in order to curb higher inflation? On this episode, we dig deep into the making of bank deposit rates with Barclays strategist Joe Abate.

Bloomberg's Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets and economics. Join the conversation every Monday and Thursday.

Bloomberg's Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets and economics. Join the conversation every Monday and Thursday.

Bloomberg's Joe Weisenthal and Tracy Alloway analyze the weird patterns, the complex issues and the newest market crazes. Join the conversation every Tuesday and Thursday for interviews with the most interesting minds in finance, economics and markets.

Odd Lots

On Bloomberg’s Odd Lots podcast Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets, and economics. Join the conversation every Monday and Thursday. 

On Bloomberg’s Odd Lots podcast Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets, and economics. Join the conversation every Monday and Thursday.

Why Interest Rates on Savings Accounts Are Still So Low

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/14d2f50f-3a2f-4c69-bc76-afb1015b5801/transcript

Advertisement