I wouldn’t define that as being screwed, but they certainly are disadvantages. Fixed rates can work in your favor under certain scenarios like how the government is currently reducing bond rates which causes everyone else to lower their APY. Fixed rates mean you aren’t affected when the government decides to pay less.
If their is high inflation (higher than the CD), then CDs are bad. Your money is locked in and losing real value over time due to the CD rates not being high enough.
Thats why I said it depends on what you are trying to defend against. What’s hard is the economy is teetering between recession->low interest rates and high inflation. It seems like the Fed has gotten inflation under relative control, but bond sell offs would probably trigger rising bond rates (as the US has to make bonds more appealing), which I fear could lead to inflationary pressure in the US. However, given Trump it’s hard to know what he’ll do next so maybe diversification is the only thing to do.
I wouldn’t define that as being screwed, but they certainly are disadvantages. Fixed rates can work in your favor under certain scenarios like how the government is currently reducing bond rates which causes everyone else to lower their APY. Fixed rates mean you aren’t affected when the government decides to pay less.
If their is high inflation (higher than the CD), then CDs are bad. Your money is locked in and losing real value over time due to the CD rates not being high enough.
Thats why I said it depends on what you are trying to defend against. What’s hard is the economy is teetering between recession->low interest rates and high inflation. It seems like the Fed has gotten inflation under relative control, but bond sell offs would probably trigger rising bond rates (as the US has to make bonds more appealing), which I fear could lead to inflationary pressure in the US. However, given Trump it’s hard to know what he’ll do next so maybe diversification is the only thing to do.