Rising interest rates making you wonder whether to invest extra money or keep it in cash? For some, holding cash may be short-sighted. When interest rates change, they don’t often do so uniformly across the curve. The current rate hike cycle illustrates this quite well, given the speed. The federal funds rate is the shortest of short-term interest rates.
It’s the reference interest rate for overnight borrowing between financial institutions like banks. So when the federal funds rate goes up, it can have an outsized impact on shorter term interest rates on assets like Treasury bills (T-bills).
When interest rates change, they don’t often do so uniformly across the yield curve. In the chart above, it’s worth noting that the 1-month T-bill rate is being distorted by the debt ceiling talks. To help investors compare cash and equivalents, interest rates (or yields) are usually in annualized terms. For example, the annual percentage yield (APY) in a savings account, say 4.5%, assumes the current interest rate stays the same for a year and future interest payments are added to the balance and compounded. On a monthly basis, for simplicity, let’s assume this equates to an interest rate of
Read more:
Forbes »
Five-star KJ Bolden on Georgia: The atmosphere just feels right – Rivals.com
Read more >>
Applied Materials to invest $4 bln in Silicon Valley chip research centerU.S. semiconductor toolmaker Applied Materials Inc on Monday said it plans to spend up to $4 billion on a research center in the heart of Silicon Valley to speed up advances in semiconductor manufacturing.
Morning Bid: China to hold rates steady, markets digest G7Investors also will keep the U.S. debt-ceiling talks in focus.
As hold on Bakhmut slips, Ukrainian forces push to encircle cityUkrainian forces have been reduced to small footholds in the devastated eastern city of Bakhmut but are making moves to encircle the city.
‘Irreverent Warriors’ hold hiking event in Salt Lake City to end veteran suicideA group of more than 50 veterans hiked through Salt Lake City Saturday afternoon on a mission to eliminate veteran suicide.
Padres hold onto big early lead against Red Sox; Michael Wacha wins againRougned Odor drives in four with a pair of doubles, Matt Carpenter hits two-run homer, Michael Wacha extends scoreless streak to 15 innings
Cherelle Parker to hold first press conference Monday since winning Democratic nominationOfficials say Monday’s press conference will come immediately after a meeting with Pennsylvania Governor Josh Shapiro.
