قالب وردپرس درنا توس
Home / Business / Goldman Sachs, Ally Financial Beat the Fed to a Rate Cut

Goldman Sachs, Ally Financial Beat the Fed to a Rate Cut



Goldman did not offer customers the explanation for the high-yield certificates of deposit. Pictured, Marcus offices in Salt Lake City.


Photo:
            

        Briana Scroggins for The Wall Street Journal
          

Goldman Sachs Group
             Inc.

      and

            Ally Financial
             Inc.


ALLY 1.85%

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
    

Write to Allison Prang at allison.prang@wsj.com


Source link