I am fairly sure that we would not be in quite the dire climate catastrophe that we are in now if Al Gore had won the 2000 US Presidential election (and as a corollary, I blame Ralph Nader's maniacal third party candidacy for the current situation). But, that is backwards looking.

Looking forward, I am absolutely sure that the fossil fuels industry cannot be counted on for solutions to climate change. I have seen through my work in the industry over the last few decades that it is comprised of not very creative people whose business it is to focus myopically on extraction and refinement. Absent regulation with significant penalties, the industry has done very little over this time to properly handle methane (a harmful by-product of their production). Much of the industry's research into things like algae and direct air capture could be better characterized as straight out green washing designed to justify unabated continuation and growth of the extraction and refinement businesses.

There are, of course, some notable exemptions to this. Both Orsted and Iberdrola completely transformed themselves to work in the wind industry, with Orsted quickly disposing of all of its oil producing assets and Iberdrola doing it in a slower manner. But, it takes a complete conversion away from fossil fuels for a company to become part of the solution and free itself of the carbon lobby and not many corporate leaders are willing to - or can - take that step.

Hence, we find ourselves in a ridiculous position where we are in the midst of a climate crisis and the UN and the Biden Administration, under John Kerry's direction, are allowing the world's major oil producing companies to control the narrative around climate change solutions (and conferences that provide the only global dialogue, like COP27 and COP28). Every day it continues, our children are victims of a global strategy of blocking and delaying.

Therefore, I was pleased to see that the Financial Times reported that Al Gore came out forcefully yesterday when he stated: "It is rather absurd that the world has to go and beg Saudi Arabia for permission, please, to talk about solutions to the climate crisis."

The same FT article points out that Al Gore's Generation Asset Management produced a report indicating that wind and solar, together with heat pumps and electric vehicles, can meet all new energy demand.

Al Gore is quoted as being optimistic that the report bodes well for our future. It is human nature to be optimistic, and we all should be since humans have the tools and capacity to solve these issues. However, the facts remain that we need to move faster than ever to convert the global economy from carbon.

It is going to be disruptive to break the global stranglehold of the fossil fuel industry and certain major global banks that is preventing us from getting going on this. But, it is going to be disruptive for our financial system if our ecosystem is completely destroyed. Al Gore is not providing a comprehensive solution here, but removing fossil fuel companies from the equation is absolutely necessary to focus on producing solutions that force banks and other global institutions to move rapidly.

The Fed has moved vigorously to try to reign in inflation in 2022 and 2023. After 15 years of low interest rates that have fueled dramatic US economic growth, Chairman Powell and the Fed have acted aggressively to move the Fed funds target to its current 5.25 to 5.50 range. There is probably one more quarter-point hike in store for 2023 and the Fed is guiding towards maintaining rates at this level for some time in order to drive inflation down to the Fed's current 2% target. To reinforce this point, Cleveland Fed President Loretta Meister, a Fed voting member, told Steve Liesman in Jackson Hole two weeks ago that she does not foresee any cuts to the Fed funds rate in 2024.

There are at least two reasons why I think we, in fact, will see lower rates - perhaps much lower rates - before the end of 2024, well before any sort of 2% inflation target is met.

The first reason is that we have an election on November 5, 2024. With everything on the table in this election - including the continuance of our democracy - the Fed is going to want to say that it is out of the political game.

However, it is unclear what staying out of the political game means. Chairman Powell and his associates at the Fed have already proven that they are subject to the influence and jawboning of politicians. For no reason other than Donald Trump's political objectives, Powell gave in and the Fed lowered the Fed funds rate on July 31, 2019, in spite of his stated objective otherwise.

With more than a year to go before the election, Biden's team has already made clear that an election talking point is that they have brought inflation down from much higher numbers to 3%. As inflation's current level becomes a greater and greater talking point, the Fed will come under greater pressure from pro-democracy forces to abandon the 2% target and begin to lower rates in 2024, especially if the economy and markets should experience any complications from higher rates.

Even the Republicans - or those few who understand basic economics - are concerned by the effect of higher rates on the US debt. Nikki Haley spoke about how Trump had brought debt to unsustainable levels in the first primary debate. And with higher rates complicating US debt service, Republican political figures very possibly may begin to exert pressure on the Fed to lower rates before or just after the 2024 election.

The second reason why the Fed may lower rates in 2024 is that we may not be done with the banking crisis that we experienced earlier in 2023 with the failures of Silicon Valley Bank and Republic Bank. The Wall Street Journal sounded the alarm about another shoe that is still to drop when they pointed out that the major regional banks have tremendous commercial real estate exposure which may have yet to be marked down to the post-COVID occupancy-level realities.

In the absence of another shoe to drop, the banking system does appear to have been stabilized largely when the Fed and the Treasury acted expeditiously to put in place programs that backstopped banks from the impact of higher rates in response to the bank failures in early 2023. Yet, the fact remains that banks make money lending at the long end and borrowing at the short end of the yield curve. The longer the curve remains dramatically inverted (as it is now), the more difficult it is for banks to issue new loans and fund the economy. Since the banking industry is not going to lobby for higher long-term rates, expect it to begin to lobby the Fed in 2024 to begin to cut short-term rates by lowering the Fed funds rate sooner rather than later.

So, I wouldn't be surprised if the Fed abandons its 2% inflation target, begins to declare victory for having brought inflation to 3%, and starts lowering rates in 2024.

Savings rates are more exciting than they have been in decades. But, so too are CDs, and buying one-year or two-year CDs with some of your cash reduces the risk of a Fed reversal in 2024.

(Longer term, I personally believe that the impact of climate change will be highly inflationary and that we are entering a new normal with higher interest rates so I would strongly admonish anyone to think twice about locking into longer term US Treasuries here, even though a 10-year at 4.25% or a 30-year at 4.55% may seem very attractive.)

It isn’t hard to earn 5% on savings today. There are tons of online banks with savings and money market offers at or over that level. You can also find local banks and credit unions that are equally competitive.

Compare online savings rates here.

After a half-generation where savings rates were not near 5%, it is awfully exciting to earn a real return on your cash. Or, at least it should be. Many, however, are seeking more purpose or gratification in their savings and CDs than just a number and the nice yield that comes with it.

Here are our ideas:

1. Open an account that will incentivize you to get in shape

Fitness Bank, a division of Atlanta-based Affinity Bank, offers an account that incentivizes users who record 12,500 average steps per month (10,000 if over 65) with its highest rates. The online savings account, first unveiled in 2019, is now offering 4.75% if you meet step requirements, but customers who also maintain $5,000 in a checking account may be boosted to 5.25% on their savings.

2. Earn Something Other than Savings, Like American Airlines miles

Bask Bank, like many online banks, will give you 5% in their interest savings account. Alternatively, you can earn 2.50 American miles per year per dollar on deposit in Bask’s mileage savings account. Bask has also begun offering extra mileage-earning incentives, including a 2023 summer promotion offering customers an additional 20,000 AA miles if they maintain over $50,000 on deposit for six months. Some customers opt for this frequent flier mile-accruing savings account as Bask produces a 1099-INT that values the miles at only $0.42, but, even so, they should really only do it if they can reliably extract well over 1.50 cents in value from their American Airlines miles. Another bit of good news is that Bask enables customers to easily move cash between accounts, enabling those needing small amounts of miles to get what they may need for their next redemption and go back to earning 5%.

3. Deposit Your Money with A Bank Focused on Reducing Carbon Output

Climate change is undeniable. It is also clear that mankind has the ability to take action today that will avoid the worst impact through substantial investment in wind, solar and water. That ability, as I discussed here, is being significantly impaired by a financial system dominated by very few large banks that are yet unwilling to invest in projects that will quickly render obsolete their carbon emitting long-term project financing. Why not deposit your money in a smaller bank that is committed to renewable energy and energy efficiencies projects? Forbright Bank is one such bank and they are offering a highly competitive one-year CD rate well over 5%.

Compare all CD offers here.

Editor’s Note: Banks that are listed here have advertised in the past on BestCashCow and/or are currently advertising and they are discussed here consistent with our advertising disclosure.