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3 moves savers should make ahead of the upcoming inflation report
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The U.S. inflation report is scheduled to be released this week, and depending on what it shows, the new inflation data could have a big impact on the economy. After all, inflation plays a significant role in the decisions that the Federal Reserve makes regarding interest rates — which are currently paused at a 23-year high.
When prices grow too quickly, the Fed will typically increase its federal funds rate to discourage spending — a move that typically drives up the cost of borrowing and returns on savings. When prices aren’t growing as fast as they should, the Fed generally reduces interest rates, which drives down the cost of borrowing and returns on savings.
In turn, the upcoming inflation report could set the stage for changes to monetary policy that could have an impact on your financial well-being. But what should savers do, in particular, to prepare for the upcoming inflation report?
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3 moves savers should make ahead of the upcoming inflation report
Here’s what savers should do to prepare for the upcoming inflation report:
Open a CD and lock in today’s rate
The Fed paused rate hikes late last year and rates remain paused today. However, most experts expect the Fed to start dropping rates mid-year.
Should the new inflation data show a downward trend, financial institutions could start reducing their certificate of deposit (CD) rates in anticipation of the Federal Reserve’s next moves. So, locking in today’s high CD returns may prove advantageous, as you’ll continue to earn that same rate for the full CD term, no matter what happens with the wider rate environment during that time.
But there is one caveat to consider. When you open a CD, you typically agree to leave your money in the account until it matures. In turn, you may have to pay an early withdrawal penalty to access your funds before the CD term is over. So, it’s important to ensure that you can leave your money untouched in the account to avoid those penalties.
Still, an early withdrawal penalty can be an advantage in some cases. For example, agreeing to keep your money in the account for its entire term can help you achieve your savings goals.
Lock in today’s high returns with a CD now.
Open a high-yield savings account
Keeping all of your savings in a CD may not be the best approach. After all, you should maintain an emergency fund that you can tap into if you fall on hard times, and CD access is limited. High-yield savings accounts, on the other hand, offer access to your funds and high interest rates on your money.
Traditional savings accounts currently have average returns of 0.46%, but high-yield savings accounts currently offer rates that are much higher on average. That’s important because your money needs to keep pace with or surpass the inflation rate (currently 3.1%) or it loses buying power.
As such, it makes sense to tap into today’s high savings rates to earn a meaningful return as long as you can. Just note, though, that the rates on high-yield savings accounts are variable, meaning that they can change over time due to shifts in the wider rate environment. But even if rates trend down in the future, by opening a high-yield savings account now, you will start earning a meaningful return on your high-yield savings account right away.
Add gold to your portfolio
The inflation rate has been cooling and many experts expect it to continue to drop over time. But, if those expectations are incorrect and inflation comes in hotter than expected on the upcoming report, gold could be a valuable asset to own.
And that’s due, in large part, to gold’s unique inflation-hedging qualities and other unique benefits. For example, the value of the dollar can decline during periods of high inflation, so investors tend to turn to assets that can act as a safe haven for their money — which gold can do. As such, when inflation rates are high, the demand for gold typically ticks up — sending its price up as well.
Open a high-yield savings account now to maximize returns on your savings.
The bottom line
With new inflation data expected to be released this week, there are a few moves you can make beforehand to help maximize and protect your savings. For starters, it may benefit you to open a CD and lock in a high rate or maximize your returns with a high-yield savings account for your emergency savings. And, it may be wise to invest some of your savings in gold to take advantage of any potential gains — just in case inflation comes in higher than expected again.
NEW YORK — Former New York Gov. David Paterson and his stepson were attacked in New York City on Friday night, authorities said.
The incident occurred just before 9 p.m. on Second Avenue near East 96th Street on the Upper East Side, according to the New York City Police Department.
Police said officers were sent to the scene after an assault was reported. When officers arrived, police say they found a 20-year-old man suffering from facial injuries and a 70-year-old man who had head pain. Both victims were taken to a local hospital in stable condition.
In a statement, a spokesperson for the former governor said the two were attacked while “taking a walk around the block near their home by some individuals that had a previous interaction with his stepson.”
The spokesperson said that they were injured “but were able to fight off their attackers.”
Both were taken to Cornell Hospital “as a precaution,” he added.
Police said no arrests have been made and the investigation is ongoing.
The 70-year-old Paterson, a Democrat, served as governor from 2008 to 2010, stepping into the post after the resignation of Eliot Spitzer following his prostitution scandal. He made history at the time as the state’s first-ever Black and legally blind governor.
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A 17-year-old boy was critically injured and a person is in custody after a gunman opened fire on a SEPTA bus in North Philadelphia Friday evening, police said.
At around 6:15 p.m., Philadelphia police were notified about a shooting on a SEPTA bus traveling on Allegheny Avenue near 3rd and 4th streets in North Philadelphia, Inspector D F Pace told CBS News Philadelphia.
There were an estimated 30 people on the bus at the time of the shooting, Pace said, but only the 17-year-old boy was believed to have been shot. Investigators said they believe it was a targeted attack on the teenager and that he was shot in the back of the bus at close range.
According to Pace, the SEPTA bus driver alerted a control center about the shooting, which then relayed the message to Philadelphia police, who responded to the scene shortly.
Officers arrived at the scene and found at least one spent shell casing and blood on the bus, but no shooting victim, Pace said. Investigators later discovered the 17-year-old had been taken to Temple University Hospital where he is said to be in critical condition, according to police.
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Through their preliminary investigation, police learned those involved in the SEPTA shooting may have fled in a silver-colored Kia.
Authorities then found a car matching the description of the Kia speeding in the area and a pursuit began, Pace said. Police got help from a PPD helicopter as they followed the Kia, which ended up crashing at 5th and Greenwood streets in East Mount Airy. Pace said the Kia crashed into a parked car.
The driver of the crashed car ran away but police were still able to take them into custody, Pace said.
Investigators believe there was a second person involved in the shooting who ran from the car before it crashed. Police said they believe this person escaped near Allegheny Avenue and 4th Street, leaving a coat behind.
According to Pace, police also found a gun and a group of spent shell casings believed to be involved in the shooting in the same area.
“It’s very possible that there may have been a shooting inside the bus and also shots fired from outside of the bus toward the bus,” Pace said, “We’re still trying to piece all that together at this time.”
This is an active investigation and police are reviewing surveillance footage from the SEPTA bus.