Bank Notes - Archive

Bernake Says Rates Will Remain Low

Monday, January 11th, 2010

The Federal Reserve Chairman Ben Bernake has reaffirmed his previous comments again by stating the he plans to keep interest rates near zero for an “extended period.” A period which could last at least 6 more months and maybe more…

According to key indicators like unemployment figures and inflationary fears- things seem to be improving.  However in the wake of some good news the rapidly developing dollar still causes worry of inflation along with recently rising commodities…

The beginning of a recovery may be brewing but we are still side stepping the debris caused by the real estate disaster.  Keeping rates low or near zero will buy time to allow some confidence levels to increase and also gradually exit or move away from some emergency programs to policies that were put in place to avoid a major disruption of the financial markets.  Short term programs that have been extended are sure to expire this go around, like the Temporary Liquidity Guarantee Program (TLGP), slated to disappear in June of next year.

Keeping all of the above in mind, bankers are still under pressure to lend but have not recovered from credit losses nor will they soon.  So banks and other financial institutions are looking to increase income in some other way….outsourcing programs such as our commercial and portfolio residential programs add fees to the bank without staffing expense expected in a mortgage origination channel.  AmVest’s Federally Insured Deposit Program is adding additional revenue to the banks income statement by taking advantage of almost triple the yields of federal funds.

Our programs are all government sponsored on both the asset and liability side of the balance sheet… outsourcing is making a comeback but only with the safety and security of our government sponsored programs which insure proper execution.