woensdag 21 november 2018

LIBOR Vs. Jumbo CD

Typically, the certificate of deposit rates or CD rates follow the LIBOR rate.
But since 2015, something weird happened. The LIBOR rate moved higher along with the Fed Funds rate, but the CD rate stayed at around 0%.

This means that banks don't want to pay out depositors, possibly to maximize their own profits. Also, another reason is that banks have too many deposits.

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