Latest news with #Federal Reserve
Yahoo
6 hours ago
- Business
- Yahoo
Real-time payments zoom ahead
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Dive Brief: Second-quarter transaction volume for the Federal Reserve's young FedNow real-time payments system jumped 63% over the first quarter, to 2.1 million payments, the central bank said Wednesday. Meanwhile, second-quarter volume at the older private rival RTP network, operated by The Clearing House, rose 8% to 107 million payments, compared to the first quarter, according to its release on Thursday. Still, The Clearing House, owned by some of the world's biggest banks, accounts for the lion's share of real-time payments in the U.S., capturing 98% of the second-quarter activity. That private system processed $481 billion in payments during the second quarter, nearly tripling the amount it handled in the first quarter, according to its release. By contrast, the nascent FedNow system processed $245.8 billion in transactions for the second quarter, according to its statistics. Dive Insight: Payments systems worldwide have been moving to embrace real-time networks. The competing FedNow and RTP systems, like others around the globe, have the ability to move transactions in seconds, as opposed to days on less technologically advanced networks. Given that FedNow launched just two years ago in July 2023, it stands to reason that it's experiencing higher growth than the older rival RTP, which began in 2017. But professionals who follow the industry have still wondered out loud about slow progress for FedNow. 'Volume growth is 'middling' for FedNow,' Chicago payments industry consultant Peter Tapling said by email last week in commenting on the second-quarter results. 'From these low volume numbers, we'd like to see them doubling (or more) volume quarter over quarter.' A decade ago, the central bank and financial institutions had brainstormed together about bringing real-time payments to the U.S. Eventually, the banks moved on their own to launch RTP at The Clearing House, followed by the central bank deciding later to start a rival system. The Fed made the FedNow move when it became clear that smaller financial institutions were somewhat reluctant to join the real-time payments system operated by their larger competitors, including JPMorgan Chase, Bank of America, Capital One Financial and Barclays. In any case, there is some evidence that the launch of FedNow has spurred more activity on both systems. So far, FedNow has attracted participation from about 1,400 of the approximately 8,800 banks and credit unions in the U.S., according to the Fed's latest release. It also reported that the value of FedNow's average daily volume more than quintupled to $2.7 billion. While The Clearing House didn't provide an average daily volume value, it reported the average value of a payment passed over RTP surged during the quarter to about $4,000 for June, up from $842 in January. The value of the average payment on the FedNow network was much higher at $115,332 for the quarter. That average payment size for FedNow struck Tapling as high, leading him to conclude that a significant share of the Fed's system is in handling corporate transactions. Both FedNow and RTP have been gradually increasing the limit size for the payments they are willing to handle. Recommended Reading Fiserv exec talks real-time payments and challenges Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
8 hours ago
- Business
- Forbes
Will Trump Eliminate Capital Gains Taxes For Home Sales? Here's What To Know
'We're thinking about that,' Trump told reporters Tuesday in the Oval Office when asked about a proposal to end capital gains taxes on home purchases, though he also alluded to his latest push for the Federal Reserve to lower interest rates, saying, 'If the Fed would lower the rates, we wouldn't even have to do that.'
Al Arabiya
9 hours ago
- Business
- Al Arabiya
Analysis: De-risking mood adds more demand for US corporate bonds
Investors have begun to de-risk their equity portfolios and buy more investment-grade corporate bonds as US stock indices near new record highs, in turn pushing corporate borrowing costs to their tightest levels since 1998 for the second time in eight months. Credit spreads have recovered since they were forced sharply wider on April 2, or 'Liberation Day,' when President Donald Trump announced trade tariffs and the market became uneasy about corporate fundamentals in a potential environment made susceptible to inflationary pressures and slower economic growth. The average investment-grade bond spread last stood at 80 basis points (bps), which is just 3 bps away from its lowest point of 77 hit in 1998 and had previously touched last November, according to ICE BAML data. It had touched 121 bps, or its highest since November 2023, in the days after Liberation Day. The recovery has come on the back of optimism, confirmed by recent corporate earnings, that the highest-rated companies had used the past year to reform balance sheets by paying down debt, avoiding costly acquisitions, and were prepared for an economy impacted by the inflationary impulse of tariffs or a trade war. 'The sharp tightening of credit spreads seen since Liberation Day is based on perception that trade and tariff risks have peaked... it also can be attributed to investors' confidence in US corporate fundamentals,' said Edward Marrinan, credit strategist at SMBC Nikko Securities. The Federal Reserve's reluctance to cut interest rates substantially, with inflation still stubbornly above preset targets, has also kept corporate bond yields high enough to attract strong demand from yield-focused investors like insurance companies and pension funds. But worries that corporate valuations are nearing a peak have also prompted some investors to shift money from equities to investment-grade corporate bonds, adding an extra level of pressure on credit spreads, said bankers. This heightened investor demand coupled with an overall market shift out of equities into debt could push spreads tighter in the coming months, said Michael Levitin, managing director and co-head of liquid credit at asset management firm MidOcean Partners. 'For the first time that I can think of in my career, we're seeing a shift out of equities into debt,' he added, noting it was driven by those beginning to realize they may not get the same return out of equities as they did before. 'We have had more conversations, interest in credit strategies and investment-grade fixed income given the run-up in equities,' said Nick Elfner, co-head of research at Breckinridge Capital Advisors. About $10 billion has moved out of domestic equity funds and ETFs since the beginning of 2025, at the same time as over $180 billion has flowed into taxable bond funds and ETFs, according to data from the Investment Company Institute. This reflects the added demand for fixed income, Elfner noted. Companies in the meantime are taking full advantage of this rush of demand for their bonds and raising new debt, while paying little to no new-issue premium as order books are heavily oversubscribed. The average new issue concession on nearly $51 billion of corporate bonds issued in July was a measly 2 bps with order books covered by over four times, according to Informa Global Markets data. To be sure, analysts and strategists expect this dream run in spreads to reverse, albeit gradually, in the second half, especially if the current optimism about the tariff impact on credit fundamentals is found to be misplaced. 'Our base case for (investment grade) credit spreads is widening, not tightening, as we have a forecast of 110 bps through year-end, but that number is still well within the long-term median level for spreads (of) 130 bps,' said Winnie Cisar, global head of strategy at CreditSights. Companies have had a lot of power to push through pricing to consumers and maintain strong margins despite these macroeconomic headwinds - yet a period of rising interest rates means interest coverage has come down from record highs in 2021 and created a mixed picture for credit fundamentals, Cisar added. 'If interest expense is somewhat elevated and concerns grow around the trajectory for growth and profit margins, that could act as a catalyst for a widening in spreads.'
Yahoo
9 hours ago
- Business
- Yahoo
A Healthy U.S. Economy Is Bad News for the British Pound. How to Trade It Here.
Up close shot of British bank notes_ Image by hemro via Shutterstock_ December British pound futures (B6Z25) present a selling opportunity on more price weakness. See on the daily bar chart for December British pound futures that a price uptrend has been negated and prices are now starting to trend down after last week hitting a two-month low. More News from Barchart Fundamentally, the U.S. economy is growing at a healthy pace, which is good for the greenback and also suggests the Federal Reserve won't be able to lower U.S. interest rates aggressively any time soon, if at all. Such is likely to keep the U.S. dollar in appreciation mode against other major currencies in the coming weeks. A move in December British pound futures below chart support at the July low of 1.3387 would give the bears more power and it would also become a selling opportunity. The downside price objective would be 1.2900, or below. Technical resistance, for which to place a protective buy stop just above, is located at 1.3600. IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature. Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you. On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
15 hours ago
- Business
- Yahoo
Best money market account rates today, July 22, 2025 (Earn up to 4.41% APY)
Find out which banks are offering the top rates. Money market accounts (MMAs) can be a great place to store your cash if you're looking for a relatively high interest rate along with liquidity and flexibility. Unlike traditional savings accounts, MMAs typically offer better returns, and they may also provide check-writing privileges and debit card access. This makes these accounts ideal for holding long-term savings that you want to grow over time, but can still access when needed for certain purchases or bills. Where are the best money market interest rates today? The national average interest rate for money market accounts is just 0.62%, according to the FDIC. However, the best money market account rates often pay above 4% APY — similar to the rates offered on high-yield savings accounts. Here is a look at today's highest money market account rates: Interested in earning the best possible interest rate on your savings balance? Here is a look at some of the best savings and money market account rates available today from our verified partners. This embedded content is not available in your region. Historical money market account rates Money market account rates have fluctuated significantly in recent years, largely due to changes in the Federal Reserve's target interest rate, known as the federal funds rate. In the wake of the 2008 financial crisis, for example, interest rates were kept extremely low to stimulate the economy. The Fed slashed the federal funds rate to near zero, which led to very low MMA rates. During this time, money market account rates were typically around 0.10% to 0.50%, with many accounts offering rates on the lower end of that range. Eventually, the Fed began raising interest rates gradually as the economy improved. This led to higher yields on savings products, including MMAs. However, in 2020, the COVID-19 pandemic led to a brief but sharp recession, and the Fed once again cut its benchmark rate to near zero to combat the economic fallout. This resulted in a sharp decline in MMA rates. But starting in 2022, the Fed embarked on a series of aggressive interest rate hikes to combat inflation. This led to historically high deposit rates across the board. By late 2023, money market account rates had risen substantially, with many accounts offering 4.00% or higher. Throughout 2024, MMA interest rates remained elevated, and it was possible to find accounts that paid well above 5% APY. Today, rates remain high by historical standards, though they've begun a downward trajectory following the Fed's most recent rate cuts later in late 2024. Today, online banks and credit unions tend to offer the highest rates. What to consider when choosing a money market account When comparing money market accounts, it's important to look beyond just the interest rate. Other factors, such as minimum balance requirements, fees, and withdrawal limits, can impact the total value you get from the account. For example, it's common for money market accounts to require a large minimum balance in order to earn the highest advertised rate — as much as $5,000 or more in some cases. Other accounts may charge monthly maintenance fees that can eat into your interest earnings. However, there are several MMAs available that offer competitive rates without any balance requirements, fees, or other restrictions. That's why it's important to shop around and compare accounts before making a decision. Additionally, ensure that the account you choose is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), which guarantees deposits up to $250,000 per institution, per depositor. Most money market accounts are federally insured, but it's important to double-check in the rare case the financial institution fails. Read more: Are money market accounts safe? Sign up for the Mind Your Money weekly newsletter By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Money market account rates: Frequently asked questions What are money market rates right now? Today, money market account rates are still quite high by historical standards. The best accounts provide over 4% APY, with the highest rate available today at 4.51% APY. How much will $10,000 make in a money market account? The amount $10,000 will earn in a money market account depends on the annual percentage yield (APY) offered by the account, as well as how long you keep your money in the account. Let's say you choose to deposit $10,000 in a money market account that earns 4% APY with monthly compounding interest. After one year, you would earn $407.44 in interest, for a total balance of $10,407.44. What is the downside of a money market account? Money market accounts are generally safe and flexible savings options, but like any other financial product, they come with some downsides, too. For instance, some MMAs require a high minimum balance to open the account or to earn the advertised APY. Failing to maintain that minimum balance can result in penalties or reduced interest rates. Additionally, money market rates are variable, which means they can change at any time at the bank's discretions. If interest rates drop, so will your account APY, which can make future earnings unpredictable compared to fixed-rate products like CDs. This embedded content is not available in your region.
