The Federal Reserve’s quickening pace of tightening raises the prospect that consumers and businesses may aggressively look to earn more on their cash.
It is natural for people to want more for their savings as rates rise. The Federal Reserve’s most recent move to raise rates is surely beginning to catch the attention of people who have money deposited in banks earning minuscule interest. The prospect of inflation is likely to make people even more attuned to their cash, too. A recent survey of about 2,000 U.S. consumers, published by Morgan Stanley analysts on Monday, found that concern about inflation was the highest ever in their survey history. Over 40% of respondents said they would consider opening a new savings account for a rate of 1%, and over 60% would consider it for 2%.