The Federal Reserve raised interest rates by a quarter-percentage point at its meeting earlier this week, lifting the fed funds rate, a key bank lending rate, to a target range of 5.25% to 5.50%. Avid savers jumped at the opportunity for greater returns as high-yield savings accounts crept closer to five percent.
It was the 11th interest rate hike since March 2022, bringing the benchmark borrowing rate to its highest level since 2001. As the market responds to the new rate increase, money market funds could begin offering comparable rates to those of high-yield savings accounts (HYSA). Should rate watchers keep their money where it is or move on to potentially higher yields?
