Money Markey Rates 2010 Outlook
The money market rates 2010 outlook should be more of the same as 2009 was. With a weak economy, the Federal Reserve will be keeping the interest rates low to inspire growth through financial loans. This will require the financial sector to start issuing more loans which they have been reluctant to do.
The global outlook has some economist predicting a 4% growth in domestic GMP while developing economies could reach up to 6.5%. This type of growth will need the manufacturing sectors to expand. This will require loans. The faster the banking system loosens up their restrictions on loans, the faster the economy will move. This will bring inflation and higher interest rates from the Fed to keep it in control.
This is when investors and people trying to save for the future will see an increase in their money market rates. It will all start with the banks making loans. Some economists are only predicting a 2% GMP rise in the G10 countries. This will slow any type of recovery and help keep inflation and interest rates low.
Unfortunately, the rates of return on savings account are at the mercy of the economy and the financial sector. The Federal Reserve has done its part by lowering the interest rate to 0 and 0.25%. There is nothing else they can do to stimulate the economy. What is holding it back at present is the banking institution not making loans for expansion in the manufacturing sector.
Most believe this will change mid 2010 and the economy will start to grow more rapidly. It will be a long bumpy and boring road to recovery, but it will occur. This is when the money market rates 2010 outlook will begin to improve with higher rates.