Bad News for Dollar Good News for Tomorrow’s Bank Rates?

If you’ve got CDs, savings accounts, and money market accounts, you’re likely concerned about the decline in the value of the U.S. dollar. It can be very frustrating to be not only receiving low interest rates on your savings, but also to be perceiving the value of the dollars in those deposit accounts declining.

Indeed, the decline in value of the U.S. dollar has been getting a ton of press lately, all of it bad, much of it bordering on hysteria. But could bad news for the dollar actually be good news for tomorrow’s bank rates?

Fed Interest Rate Policy Due for a Pre-Planned Change

The main reason why a weak dollar could be good for tomorrow’s bank rates pertains to the idea, obviously endorsed by Fed Chairman Ben Bernanke, that low interest rates (the prime cause of the weak dollar) are necessary for a recovery of the U.S. economy.

For example, low interest rates allow people with troubled mortgages to refinance.

The thing is, everyone knows low interest rates won’t last forever. Sometime, some day, the Fed will raise interest rates–and everybody knows it. If the dollar is super-weak, the rate rise will likely be more drastic.

CDs, savings accounts, and money market account interest rates would benefit from that scenario, as would the conservative investors who utilize them.

In the meantime, Happy Thanksgiving!

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