Goldman Sachs Group
Goldman told customers Thursday it was cutting the price on its Marcus high-yield savings 2.1% from 2.2%.
"The cuts show that they are actually down to the lower rates later this year." Interest rates are on the downswing and projected to fall further, "Ally said in a note to customers explaining the move. Goldman said in a statement that "rates on certain products change based on market conditions."
The central bank began raising rates from near zero starting in 2015 at a pace that allows banks to charge borrowers more while keeping deposit costs in check. That gave Goldman, Ally and other online-only banks an opening to louder savers with above-market yields.
The Fed's decision to break even more early this year, and the possibility of a
For every 10 basis points-0.1 percentage point-that ally lowers its savings rate, the company boosts its earnings by 3%, said Vincent Caintic, managing director for Stephens Inc. "It's meaningful, "he said.
The Fed is set to meet next at the end of July. Federal-funds futures indicate that the central bank will cut its short-term benchmark.
Ally and Goldman are quietly paying attention to the rest of the industry. The average interest rate on a savings account has remained steady at 0.1% in 2019, according to Bankrate.
As the Fed contemplates rate adjustments, WSJ's Nick Timiraos takes a look at four factors ignore. Graphic illustration: Adele Morgan
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