We all know that old cliché, “the check’s in the mail.” Well, it usually isn’t, but we keep thinking it will show up at some point.
It reminds me of what we keep hearing about the Federal Reserve raising interest rates.
According to the latest job market numbers, however, banks might actually be celebrating the Holidays this year if the indicators are finally on target.
According to this MarketWatch article, a poll of economists projects more than a 200K increase in newly hired workers in November, after a huge month in October. Of course if that projection seriously overshoots the actual numbers (the actual report will be published this Friday), we might still be waiting for the increase. But even if the data falls short of 200K new jobs, frozen interest rates stand a very good chance of thawing out.
Another positive sign: Paychecks are gradually on the rise, as average hourly earnings over the past 12 months have catapulted to a six-year high of 2.5%. While that number reflects slow and steady growth, it’s an encouraging sign that could spur an increase in consumer spending.
But then the Scrooge factor may indeed set in, despite all indications otherwise. This recent Bloomberg article detailing a letter from Federal Reserve Chair Janet Yellen that defended the 7-year rate freeze by noting that “lower borrowing costs helped make large purchases more affordable for American consumers, supporting the economy and creating millions of jobs.”
But while the Fed could be accused of making its list and checking it (more than) twice, many banks have been already planning out their routes for the increase, notably how to price deposits in a comparatively fluid market. It certainly helps to have a roadmap, however, and our Executive Brief, The New Normalization: Three Keys to Gaining an Edge in Deposit Pricing, provides guidance to financial institutions that are still seeking ways to simultaneously improve pricing, collaboration and governance – while capturing the sensitivities of the bank’s customers.
