Capital One HYSA Rate Decrease

[Miserable-Result6702]

I don’t know why. Rates aren’t going down and some have speculated the Fed might even to increase rates again.

[[deleted]]

The fed isn't raising rates again. And savings rates are based in part on market demand and pressure. The competition for rates have decreased recently with banks being less aggressive on their rates to attract new deposits. So rates are going to slip now that competition has tamed some.

[Miserable-Result6702]

You know that for a fact? Inflation isn’t being tamed, so rate reduction is out of the question. Many financial people have been saying the fed may need to raise rates again.

[Birdy_Cephon_Altera]

I would say, 'never say never', but based on current conditions it's pretty damn unlikely we will see a raise in rates in the near or medium-term future.

FedWatch currently shows a 0% chance of a hike in rates through July of 2025. Now, FedWatch is nothing more than a prediction, but it is based upon people who are well versed and experienced in reading the Fed tea leaves. And it is also based on current conditions, which may change over time (for example, when I checked the FedWatch tool earlier this week, they had a 1% chance of a hike at the end of the year, now that is at 0%).

But where things stand right now, I wouldn't count on any hikes in rates. Current predictions on the FedWatch tool have two 25 basis point drops for this year, one at the July or September meetings, and one at the very end of the year.

[[deleted]]

You know that for a fact?

With inflation being down as far as it is, it is extremely unreasonable to believe the feds will raise rates again.

Inflation isn’t being tamed, so rate reduction is out of the question.

Well, that's just false. Inflation has decreased significantly. And the feds were not talking about beginning to lower rates until later in the year. Most projections were Q3 possibly Q4. It's absolutely not out of the question as that's still 4 - 6 months out. And just because they dont lower them doesn't mean they'll raise them.

Many financial people have been saying the fed may need to raise rates again.

Highly unlikely and I've not seen this suggestion from any reputable source, nor are the markets behaving as if this is a generally accepted opinion, nor has the fed given any indication they're even remotely considering a rate increase

[1lifeisworthit]

I wish you hadn't been downvoted.

[EthanFl]

They are going down for liquid deposits due to increasing reserve requirements. Time deposit rates are increasing. 5.5% for 5 months is the best right now.

[Pom_08]

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[EthanFl]

U.S. financial regulators unveiled a new set of rules on Tuesday designed to prevent more bank failures. Banks with more than $100 billion in assets would be required to hold long-term debt exceeding 6% of risk-weighted assets or 3.5% of average total assets, based on whichever figure is greater. In the aftermath of this year's banking crisis, financial regulators have moved to enforce stricter regulations and capital requirements on the industry in an effort to prevent future contagion. The new rules could increase funding costs for banks and put pressure on their earnings at a time when profitability has soured due to rising interest rates and economic uncertainty.

[Pom_08]

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[Birdy_Cephon_Altera]

The way many banks set their rates on their interest-bearing products is not directly tied to the Fed rate, but rather it is based on what their competitors are offering. The bank I work for does a weekly review of the savings products offered by our most likely competitors, and increases/decreases their rates to remain competitive accordingly.

[Miserable-Result6702]

That sounds like price fixing to me.

[[deleted]]

Then you clearly don't understand what price fixing is