Increases to the Federal Reserve's policy rate usually take a few quarters to filter through to bank deposit rates, say Goldman Sachs economists.
A flood of cash going into money-market funds and other higher yielding cash-like assets has been a key focus in financial markets since March when Silicon Valley Bank and Signature Bank collapsed.
Those failures put a spotlight on the stability of the U.S. banking system, but also on alternative ways for savers and investors to earn yield as the Federal Reserve continues its work of the past year to tame inflation through higher rates. But even then, deposit rates and 1-year CD yields were seeing only a portion of the increases to short-term rates.
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