Your retirement account may have been negatively impacted by the Federal Reserve’s press conference last week. These days, interest rates significantly impact the financial markets, and fears of a recession and a potential banking crisis are amplifying these impacts. To maximize the return on your retirement account, you must understand how the Fed’s statement affects markets and how to manage the related risks.
For over a decade, savers have been earning little or nothing on their deposits due to low-interest rates. Increasing interest rates should have changed that. So far this year, the Fed has lifted rates by 225 basis points, or 2.25 percentage points. Borrowers’ financing costs have risen as a result, but savers have yet to reap the same benefits.