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The Fed: Savers haven’t benefited during this Fed rate-hike cycle, Powell admits

One thing that’s notable this rate-hike cycle is that as the Federal Reserve ratchets up interest rates — five increases so far this cycle — banks haven’t followed suit in the interest they pay savers.

The issue came up as House Financial Services Committee Chairman Jeb Hensarling sparred with Fed Chairman Jerome Powell on Tuesday. Hensarling was complaining about the interest the Fed pays banks. “You pay 150 basis points, constituents are getting 10,” the Texas Republican said.

“Retail deposits as you know are sticky on the way up — they generally come up with a lag,” Powell replied.

That’s reflected in the data.

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