Connect with us

Goldman Sachs Is Paying More for Your Savings

Some banks have begun to pay savers well following the Federal Reserve’s rate hikes.

Published

on

Some banks have begun to pay savers well following the Federal Reserve's rate hikes.

Inflation, which is at its highest for 40 years, is a headache for consumers. From food to gasoline to just about everything else, inflation is burning household budgets. 

Aware of how reduced household spending could hobble the economy -- consumption is, after all, the engine of American growth -- the Federal Reserve has started to raise interest rates to try to tame soaring prices of goods and services.

The federal funds rate now ranges 3% to 3.25% and is expected to increase to 4.5% by the end of 2022. 

A rise in interest rates often prompts commercial banks to raise the rates at which they lend money. At the same time, consumers who keep their money in bank savings accounts expect the banks to pay them more in interest to use those funds.

Marcus, LendingClub Make Saving More Attractive

While some banks have not yet made a gesture to reward savers, others have acted quickly, offering more attractive deposit rates when the financial markets are shaken by uncertainty about the economy's health.

This is the case of Marcus, Goldman Sachs' online retail bank. Two days after the last interest rate hike of 0.75% by the Fed, the institution sent an email to its customers on Sept. 23 to "celebrate our higher rate!"

In an email obtained by TheStreet, Goldman Sachs's  (GS) - Get Goldman Sachs Group Inc. (The) Report Marcus division said it raised the rate of its high-yield online savings account. The new annual percentage rate is 2.15%.

"It's already been applied to your account(s). There's no action needed from you," the online bank told its customers.

It added: "Our team at Marcus, along with our colleagues at Goldman Sachs, closely follows market trends and pays close attention to the Fed and other key developments in the economy.

"When the Fed raises or lowers its rate, banks tend to increase or decrease the rates they offer on deposit accounts like savings accounts."

If the rate Marcus offers is interesting, it's still not among the highest on the market.

It is the LendingClub  (LC) - Get LendingClub Corporation Report fintech that offers the best rate -- 2.65% -- according to NerdWallet, which updated its data to Sept. 26.

In January, the APY on its high-yield savings account was under 1%, the firm told TheStreet. The APY is the money or interest you earn on a savings account, and sometimes on a checking account, over one year.

"We continuously monitor rates to provide a market-leading rate to our members," Alia Dudum, a spokesperson, said in an emailed statement. Dudum added that there was no barrier to opening a savings account with LendingClub and benefiting from this rate.

"There isn’t anything special consumers need to do to take advantage of this favorable rate. Just apply," Dudum added. "We will continue to monitor rates."

Wells Fargo Is Lagging

For consumers looking for better returns on their savings, online banks and medium-sized banks seem to be the doors to knock on. Indeed, they dominate the NerdWallet top 8. 

The Citbank division of First Citizens BancShares,  (FCNCA) - Get First Citizens BancShares Inc. Class A Common Stock Report Raleigh, N.C., offered an APY of 0.5% in January. Nine months later, this rate for savings accounts is 2.4%.

The firm "is continuously analyzing our products and services, including our savings account rates, to best serve our customers," spokesperson Lexa Tutela said. "We aim to provide convenience and security through our competitive rates, mobile banking services and no monthly service fees."

Parent First Citizens pays 2.35% for your money. It requires the savings account to have a minimum of $5,000 to qualify for that rate. 

The fintech SoFi  (SOFI) - Get SoFi Technologies Inc. Report rewards savers with a rate of 2% and offers a bonus of as much as $300 at the time of a direct-deposit account is opened. 

Attractive pay rates are not widely available. According to NerdWallet, the national average APY for savings accounts currently is 0.17%. 

Wells Fargo  (WFC) - Get Wells Fargo & Company Report offers some of the lowest rates on the market. The interest rate is 0.01% for basic saving accounts, or Way2save, and up to 0.02% APY for customers with a linked Wells Fargo checking account. 

It also offers a selection of certificates of deposit, or CDs, with a minimum opening balance of $2,500.

In general, the rate depends on where the customer is located.

"We set our savings and CD rates based on the competitive dynamics of the marketplace, which may vary by market," Aryel Bell, a Wells Fargo spokesperson, said by email. 

"We review our rates regularly, yet given the factors that go into the analysis and the ever-changing marketplace, we cannot speculate on future rate changes."

One reason the big banks aren't more generous with their interest on deposits is they don't feel any pressure to do so. Consumers continue to borrow massively. 

"Our consumer-banking segment continued to see good momentum as we grew loans at the fastest quarterly pace in nearly three years," Bank of America's  (BAC) - Get Bank of America Corporation Report Chief Executive Brian Moynihan told analysts during the second-quarter-earnings' call on July 18.

Also noteworthy: The banks were flooded with savers' cash following the various stimulus payments the government made during the covid-19 pandemic.

Read More

Continue Reading

Uncategorized

New research reveals gut microbiota link to colitis: intestinal epithelial axin1 deficiency offers protective effects

A groundbreaking study conducted by Jun Sun’s research team at the University of Illinois Chicago has revealed a new and critical role of Axin1 in regulating…

Published

on

A groundbreaking study conducted by Jun Sun’s research team at the University of Illinois Chicago has revealed a new and critical role of Axin1 in regulating intestinal epithelial development and microbial homeostasis. The research, published in the journal Engineering, highlights the potential therapeutic strategies for human inflammatory bowel disease (IBD).

Credit: Shari Garrett et al.

A groundbreaking study conducted by Jun Sun’s research team at the University of Illinois Chicago has revealed a new and critical role of Axin1 in regulating intestinal epithelial development and microbial homeostasis. The research, published in the journal Engineering, highlights the potential therapeutic strategies for human inflammatory bowel disease (IBD).

IBD, a chronic inflammatory disorder affecting the gastrointestinal tract, has been a significant health concern worldwide. The study focused on understanding the role of Axin1, a negative regulator of Wnt/β-catenin signaling, in maintaining gut homeostasis and host response to inflammation.

The research team analyzed Axin1 expression in human inflammatory bowel disease datasets and found increased Axin1 expression in the colonic epithelium of IBD patients. To further investigate the effects and mechanism of intestinal Axin1 in regulating intestinal homeostasis and colitis, the team generated new mouse models with Axin1 conditional knockout in intestinal epithelial cells (Axin1ΔIEC) and Paneth cells (Axin1ΔPC).

The results showed that Axin1ΔIEC mice exhibited altered goblet cell spatial distribution, Paneth cell morphology, reduced lysozyme expression, and an enriched presence of Akkermansia muciniphila (A. muciniphila) in the gut microbiota. Importantly, the absence of intestinal epithelial and Paneth cell Axin1 led to decreased susceptibility to dextran sulfate sodium-induced colitis in vivo.

Furthermore, when Axin1ΔIEC and Axin1ΔPC mice were cohoused with control mice, they became more susceptible to dextran sulfate sodium (DSS)-colitis, suggesting the protective role of Axin1 in the presence of a healthy gut microbiota. Treatment with A. muciniphila further reduced the severity of DSS-colitis, highlighting its potential as a therapeutic target.

Interestingly, antibiotic treatment did not change the proliferation of intestinal epithelial cells in the control mice. However, in Axin1ΔIEC mice with antibiotic treatment, the intestinal proliferative cells were significantly reduced, indicating the non-colitogenic effects driven by the gut microbiome.

These findings demonstrate the novel role of Axin1 in mediating intestinal homeostasis and the microbiota. The loss of intestinal Axin1 protects against colitis, likely through the regulation of epithelial Axin1 and Axin1-associated A. muciniphila. Further mechanistic studies using specific Axin1 mutations will be crucial in elucidating how Axin1 modulates the microbiome and host inflammatory response, paving the way for new therapeutic strategies for human IBD.

Jiaming Wu, editor of the subject of medicine and health of Engineering, commented, “This study provides valuable insights into the development of inflammatory bowel disease and offers potential therapeutic strategies for its treatment. By understanding the intricate interactions between Axin1, the gut microbiota, and host immunity, researchers can develop targeted interventions to restore intestinal homeostasis and alleviate the symptoms of IBD.”

The research team’s findings have significant implications for the field of gastroenterology and hold promise for the development of novel treatments for IBD. As further studies are conducted, the scientific community eagerly awaits the potential therapeutic breakthroughs that may arise from this research.

The paper “Profiling the Antimalarial Mechanism of Artemisinin by Identifying Crucial Target Proteins”, authored by Shari Garrett, Yongguo Zhang, Yinglin Xia, Jun Sun. Full text of the open access paper: https://doi.org/10.1016/j.eng.2023.06.007. For more information about the Engineering, follow us on Twitter (https://twitter.com/EngineeringJrnl) & like us on Facebook (https://www.facebook.com/EngineeringPortfolio).

 

About Engineering

Engineering (ISSN: 2095-8099 IF:12.8) is an international open-access journal that was launched by the Chinese Academy of Engineering (CAE) in 2015. Its aims are to provide a high-level platform where cutting-edge advancements in engineering R&D, current major research outputs, and key achievements can be disseminated and shared; to report progress in engineering science, discuss hot topics, areas of interest, challenges, and prospects in engineering development, and consider human and environmental well-being and ethics in engineering; to encourage engineering breakthroughs and innovations that are of profound economic and social importance, enabling them to reach advanced international standards and to become a new productive force, and thereby changing the world, benefiting humanity, and creating a new future.


Read More

Continue Reading

International

New findings on hair loss in men

A receding hairline, a total loss of hair from the crown, and ultimately, the classical horseshoe-shaped pattern of baldness: Previous research into male…

Published

on

A receding hairline, a total loss of hair from the crown, and ultimately, the classical horseshoe-shaped pattern of baldness: Previous research into male pattern hair loss, also termed androgenetic alopecia, has implicated multiple common genetic variants. Human geneticists from the University Hospital of Bonn (UKB) and by the Transdisciplinary Research Unit “Life & Health” of the University of Bonn have now performed a systematic investigation of the extent to which rare genetic variants may also contribute to this disorder. For this purpose, they analyzed the genetic sequences of 72,469 male participants from the UK Biobank project. The analyses identified five significantly associated genes, and further corroborated genes implicated in previous research. The results have now been published in the prestigious scientific journal Nature Communications.

Credit: University Hospital Bonn / Katharina Wislsperger

A receding hairline, a total loss of hair from the crown, and ultimately, the classical horseshoe-shaped pattern of baldness: Previous research into male pattern hair loss, also termed androgenetic alopecia, has implicated multiple common genetic variants. Human geneticists from the University Hospital of Bonn (UKB) and by the Transdisciplinary Research Unit “Life & Health” of the University of Bonn have now performed a systematic investigation of the extent to which rare genetic variants may also contribute to this disorder. For this purpose, they analyzed the genetic sequences of 72,469 male participants from the UK Biobank project. The analyses identified five significantly associated genes, and further corroborated genes implicated in previous research. The results have now been published in the prestigious scientific journal Nature Communications.

Male-pattern hair loss is the most common form of hair loss in men, and is largely attributable to hereditary factors. Current treatment options and risk prediction are suboptimal, thus necessitating research into the genetic underpinnings of the condition. To date, studies worldwide have focused primarily on common genetic variants, and have implicated more than 350 genetic loci, in particular the androgen receptor gene, which is located on the maternally inherited X chromosome. In contrast, the contribution to this common condition of rare genetic variants has traditionally been assumed to be low. However, systematic analyses of rare variants have been lacking. “Such analyses are more challenging as they require large cohorts, and the genetic sequences must be captured base by base, e.g., through genome or exome sequencing of affected individuals,” explained first author Sabrina Henne, who is a doctoral student at the Institute of Human Genetics at the UKB and the University of Bonn. The statistical challenge lies in the fact that these rare genetic variants may be carried by very few, or even single, individuals. “That is why we apply gene-based analyses that first collapse variants on the basis of the genes in which they are located,” explained corresponding author PD Dr. Stefanie Heilmann-Heimbach, who is a research group leader at the Institute of Human Genetics at the UKB at the University of Bonn. Among other methods, the Bonn researchers used a type of sequence kernel association test (SKAT), which is a popular method for detecting associations with rare variants, as well as GenRisk, which is a method developed at the Institute of Genomic Statistics and Bioinformatics (IGSB) at the UKB and the University of Bonn.

Possible relevance of rare variants in male-pattern hair loss

The research involved the analysis of genetic sequences from 72,469 male UK Biobank participants. Within this extensive data set, Bonn geneticists, together with researchers from the IGSB and the Center for Human Genetics at the University Hospital Marburg, examined rare gene variants that occur in less than one percent of the population. Using modern bioinformatic and statistical methods, they found associations between male-pattern hair loss and rare genetic variants in the following five genes: EDA2R, WNT10A, HEPH, CEPT1, and EIF3F.

Prior to the analyses, EDA2R and WNT10A were already considered candidate genes, as based on previous analyses of common variants. “Our study provides further evidence that these two genes play a role, and that this occurs through both common and rare variants,” explained Dr. Stefanie Heilmann-Heimbach. Similarly, HEPH is located in a genetic region that has already been implicated by common variants, namely the EDA2R/Androgen receptor, which is a region that has consistently shown the strongest association with male-pattern hair loss in past association studies. “However, HEPH itself has never been considered as a candidate gene. Our study suggests that it may also play a role,” explained Sabrina Henne. “The genes CEPT1 and EIF3F are located in genetic regions that have not yet been associated with male-pattern hair loss. They are thus entirely new candidate genes, and we hypothesize that rare variants within these genes contribute to the genetic predisposition. HEPH, CEPT1, and EIF3F represent highly plausible new candidate genes, given their previously described role in hair development and growth.” Furthermore, the results of the study suggest that genes that are known to cause rare inherited diseases affecting both skin and hair (such as the ectodermal dysplasias) may also play a role in the development of male-pattern hair loss. The researchers hope that the puzzle pieces they have discovered will improve understanding of the causes of hair loss, and thus facilitate reliable risk prediction and improved treatment strategies.

The research was supported by funding from the Medical Faculty of the University of Bonn. Prof. Dr. Markus Nöthen, Director of the Institute of Human Genetics at UKB and co-author of the study, is a member of the Transdisciplinary Research Area (TRA) “Life and Health” at the University of Bonn. The publication costs in open access format were funded by the DEAL project of the University of Bonn.


Read More

Continue Reading

Uncategorized

The New York Fed DSGE Model Forecast— September 2023

This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE)…

This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since June 2023. As usual, we wish to remind our readers that the DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process. For more information about the model and variables discussed here, see our DSGE model Q & A.

The New York Fed model forecasts use data released through 2023:Q2, augmented for 2023:Q3 with the median forecasts for real GDP growth and core PCE inflation from the Survey of Professional Forecasters (SPF), as well as the yields on ten-year Treasury securities and Baa-rated corporate bonds based on 2023:Q3 averages up to August 30. Moreover, starting in 2021:Q4, the expected federal funds rate between one and six quarters into the future is restricted to equal the corresponding median point forecast from the latest available Survey of Primary Dealers (SPD) in the corresponding quarter. The current projection can be found here.

The change in the forecast relative to June reflects the fact that the economy remains resilient in spite of the increasingly restrictive stance of monetary policy. Output growth is projected to be almost 1 percentage point higher in 2023 than forecasted in June (1.9 versus 1.0 percent) and somewhat higher than June for the rest of the forecast horizon (1.1, 0.7, and 1.2 percent in 2024, 2025, and 2026, versus 0.7, 0.4, and 0.9 in June, respectively). The probability of a not-so-soft recession, as defined by four-quarter GDP growth dipping below -1 percent by the end of 2023, has become negligible at 4.6 percent, down from 26 percent in June. According to the model, much of the resilience in the economy so far stems from the surprising strength in the financial sector, which counteracts the effects of the tightening in monetary policy. Inflation projections are close to what they were in June: 3.7 percent for 2023 (unchanged from the previous forecast), 2.2 percent for 2024 (down from 2.5 percent), and 2.0 percent for both 2025 and 2026 (down from 2.2 and 2.1 percent, respectively). The model still sees inflation returning close to the FOMC’s longer-run goal by the end of next year.

The output gap is projected to be somewhat higher over the forecast horizon than it was in June, consistent with the fact that the surprising strength of the economy is mainly driven by demand factors such as financial shocks, as opposed to supply factors. As in the June forecast, the gap gradually declines from its current positive value to a slightly negative value by 2025. The real natural rate of interest is estimated at 2.5 percent for 2023 (up from 2.2 percent in June), declining to 2.2 percent in 2024, 1.9 percent in 2025, and 1.6 percent in 2026. 

Forecast Comparison

Forecast Period2023202420252026
Date of ForecastSep 23Jun 23Sep 24Jun 24Sep 25Jun 25Sep 26Jun 26
GDP growth
(Q4/Q4)
1.9
 (0.2, 3.6) 
1.0
 (-1.9, 4.0) 
1.1
 (-4.0, 6.3) 
0.7
 (-4.2, 5.7) 
0.7
 (-4.4, 5.8) 
0.4
 (-4.7, 5.5) 
1.2
 (-4.2, 6.6) 
0.9
 (-4.5, 6.3) 
Core PCE inflation
(Q4/Q4)
3.7
 (3.4, 3.9) 
3.7
 (3.3, 4.2) 
2.2
 (1.5, 3.0) 
2.5
 (1.6, 3.3) 
2.0
 (1.1, 2.9) 
2.2
 (1.2, 3.1) 
2.0
 (1.0, 3.0) 
2.1
 (1.1, 3.2) 
Real natural rate of interest
(Q4)
2.5
 (1.3, 3.7) 
2.2
 (1.0, 3.5) 
2.2
 (0.8, 3.7) 
1.8
 (0.3, 3.2) 
1.9
 (0.3, 3.4) 
1.5
 (-0.1, 3.0) 
1.6
 (-0.0, 3.3) 
1.3
 (-0.4, 3.0) 
Source: Authors’ calculations.
Notes: This table lists the forecasts of output growth, core PCE inflation, and the real natural rate of interest from the September 2023 and June 2023 forecasts. The numbers outside parentheses are the mean forecasts, and the numbers in parentheses are the 68 percent bands.

Forecasts of Output Growth

Source: Authors’ calculations.
Notes: These two panels depict output growth. In the top panel, the black line indicates actual data and the red line shows the model forecasts. The shaded areas mark the uncertainty associated with our forecasts at 50, 60, 70, 80, and 90 percent probability intervals. In the bottom panel, the blue line shows the current forecast (quarter-to-quarter, annualized), and the gray line shows the June 2023 forecast.

Forecasts of Inflation

Source: Authors’ calculations.
Notes: These two panels depict core personal consumption expenditures (PCE) inflation. In the top panel, the black line indicates actual data and the red line shows the model forecasts. The shaded areas mark the uncertainty associated with our forecasts at 50, 60, 70, 80, and 90 percent probability intervals. In the bottom panel, the blue line shows the current forecast (quarter-to-quarter, annualized), and the gray line shows the June 2023 forecast.

Real Natural Rate of Interest

Source: Authors’ calculations.
Notes: The black line shows the model’s mean estimate of the real natural rate of interest; the red line shows the model forecast of the real natural rate. The shaded area marks the uncertainty associated with the forecasts at 50, 60, 70, 80, and 90 percent probability intervals.

Marco Del Negro is an economic research advisor in Macroeconomic and Monetary Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.

photo of Gundam Pranay

Pranay Gundam is a research analyst in the Federal Reserve Bank of New York’s Research and Statistics Group.

Donggyu Lee is a research economist in Macroeconomic and Monetary Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.

Ramya Nallamotu is a research analyst in the Federal Reserve Bank of New York’s Research and Statistics Group.

photo of Brian Pacula

Brian Pacula is a research analyst in the Federal Reserve Bank of New York’s Research and Statistics Group.

How to cite this post:
Marco Del Negro, Pranay Gundam, Donggyu Lee, Ramya Nallamotu, and Brian Pacula, “The New York Fed DSGE Model Forecast— September 2023,” Federal Reserve Bank of New York Liberty Street Economics, September 22, 2023, https://libertystreeteconomics.newyorkfed.org/2023/09/the-new-york-fed-dsge-model-forecast-september-2023/.


Disclaimer
The views expressed in this post are those of the author(s) and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author(s).

Read More

Continue Reading

Trending