New York (CNN Business) — Americans are so nervous about the state of the economy that they are stashing cash in the bank at a rate not seen since the first year of Ronald Reagan’s presidency.
The United States government’s Bureau of Economic Analysis reported Thursday morning that the savings rate surged to 13.1% in March — up from 8% in February.
That’s the highest savings rate since November 1981. Americans had $2.17 trillion in savings last month.
Consumers are putting more money away at a time when bank savings, money market accounts and Treasury bonds are yielding next to nothing after the Federal Reserve slashed rates to zero last month and launched numerous lending programs in the wake of the Covid-19 pandemic.
At a press conference on Wednesday, Fed chair Jerome Powell was asked about what savers should do since rates are at zero. He conceded that for people “really just relying on their bank savings account earnings, you’re not going to benefit from low interest rates.”