May 2019: What Will the Fed Do Next?

Published May 6, 2019

Annuity rates have held steady this month. After several consecutive months of Treasury Bond declines, things leveled off in April. Yields on April 1st were 2.49% and closed at 2.52% on May 1st, so they were effectively flat on the month.

The real question: Where will rates go from here? On the one hand, the President has been trying to strong arm the Fed into cutting rates by 1%, which would be a massive cut. This would hurt annuity payout levels. Until recently, the Fed expected to increase rates in 2019 and into 2020, but now has backed away from that stance, saying that it expects to hold rates steady for the foreseeable future. Wage growth is close to 3%, the stock market has recently been hitting all-time highs again, and most other economic indicators are generally positive. In that environment, it’s hard to make the case for rate cuts. Given these countervailing forces, the most likely scenario is the Fed doesn’t touch rates this year and waits for some kind of shift in the economy.

Annuity Intelligence Report

Most insurers held their immediate annuity, longevity annuity and fixed annuity rates constant last month, but there were a handful of insurers that dropped rates. Click to download May 2019’s Annuity Intelligence Report.


Period Certain Only Quotes

We’ve just added Period Certain quotes to our real-time income annuity quoting portal. Read more here about this new addition to our quoting platform.

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Blueprint Income

Blueprint Income

Financial Planning Professional

We are a team of finance, insurance, and actuarial professionals working to make it easier for everyone to achieve a steady and comfortable retirement. We write about annuities (the good and the bad) and provide strategies to help Americans prepare for retirement.

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