After Goldman Sachs, Ally Financial cut interest rates, savers hit brick wall

Goldman Sachs Group Inc. and Ally Financial Inc. beat the Federal Reserve to a rate cut this week, as the U.S. central bank weighs whether or not to lower the benchmark federal funds rate.

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On Thursday, according to the Wall Street Journal, Goldman told customers that it was lowering the rate on its Marcus high-yield savings account to 2.15 percent from 2.25 percent, following Ally’s decision on Tuesday to lower its online-savings rate to 2.1 percent from 2.2 percent, an Ally spokesperson confirmed to FOX Business.

Goldman did not immediately respond to a FOX Business request for comment.

It was the first time since October 2013 that Ally lowered rates.

“After a period of increases, interest rates are on the downswing and are projected to fall further,” an Ally spokesperson said on Friday, noting that, “Even with this change, our rate remains at 20-times the national average.”

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The Federal Reserve began, after a prolonged period of net neutral rates, raising interest rates in 2015. But after nine increases, policymakers signaled during their latest meeting in June that a rate cut could be on the horizon, thanks to concerns about slowing global growth and a U.S.-China trade spat.

“The reason you may see these lowering of deposit rates is the three-month treasury has moved down, and it was upwardly sloping three months to 10 years, eight weeks ago,” President of the Federal Reserve Bank of Dallas Robert Kaplan said on Friday.

Currently, traders are pricing in a 100 percent chance of a Fed rate during the upcoming July meeting, which is slated to take place at the end of the month.

Kaplan told FOX Business’ Maria Bartiromo during an interview that there’s a bit of an echo chamber effect: Essentially, banks think the U.S. central bank will lower rates, so they’re doing so preemptively.


“And the other thing is, I think the curve is maybe reflecting expectations of the Fed,” he added.