Interest Rates

The US Federal Reserve reduced base interest rates from 3% to 2.25%. Inflation last year in the USA was 4.1%. If you placed money in a savings account at 2.25%, you would actually lose 1.85% of it’s value in 1 year. Not really “savings”. According to The Economist, if you use GDP per head (a more accurate indicator of standard of living), the USA has actually been in recession since Q4 2007 with quality of life falling by 0.4%/year. Just something to think about.

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