Press Releases Archives: September, 2007

"Rate cut pinches yields on savings" Says Associated Press. "Money-market yields fall with the Fed because the assets they buy are pegged in many ways to the Fed funds rate," the article quotes Peter Crane, president of money-fund tracker Crane Data. The piece says, "Money-market funds are focusing on even shorter-term securities than usual to reduce risk. Many have shied away from mortgage-backed securities in recent months, as credit quality has weakened".

"Lock in a solid savings rate" writes The article discusses CDs, money markets, and the Fed rate cut's impact on savers, and quotes Crane Data's Pete Crane, "There is no secret to money fund yields - they follow the Fed. They will drop, and drop rather quickly.... The decline may get diluted or delayed slightly [by high rates on asset-backed commercial paper]. But it's coming - there's no doubt about that." says "Commercial paper activity shows signs of steadying". "The commercial paper market showed significant signs of stabilising on Thursday, suggesting short-term investors that have driven a dramatic shrinkage in the market may have largely completed their exit from commercial paper backed by mortgages and other assets," says the FT. The paper quotes Peter Crane, "Since problems in the commercial paper market began, much of the paper has probably already turned over.... Contraction in CP is not a sign of weakness, it's one of strength as issuers are escorted in an orderly manner out of the market."