Federal Reserve Hints At Raising Interest Rates Soon
At just 1.75 to 2 percent, the federal interest rate is at an all-time low right now; the normal rate is 3 percent. The U.S. economy is also strong and according to the Federal Reserve’s most recent report in August, economic conditions are “strengthening”. This all sounds like good news so you may be wondering why the Federal Reserve is likely to raise interest rates two times before the end of the year and, more importantly, what it means for you as a borrower.
Most economists agree that it is better to raise interest rates when the economy is healthy in order to prevent it from overheating. If the Federal Reserve waits and inflation gets too high, they will be forced to raise rates quickly. Raising rates quickly often triggers a downturn and downturns most often hurt working-class people more as job losses tend to rise during recessions. This is why it is predicted (and the Federal Reserve has hinted) that interest rates will soon rise, twice before the end of the year.
What This Means For Your Adjustable Rate Mortgage
While the Federal Reserve does not set mortgage rates, its decisions do influence them. There is no reason to panic but if you have an adjustable rate mortgage or home equity line of credit (HELOC), now is the time to seriously consider how these upcoming interest rate increases will affect your household. For example, if your budget is already tight, these increases may mean it is time to consider refinancing or selling your home.
Again, there is no reason to make a rash decision - You’re likely to have questions and we are here to help. Book your free consultation with us at any one of our eight office locations in New York, New Jersey, and Connecticut to speak confidentially with one of our legal professionals. Over the past ten years, we’ve guided thousands through various legal and financial challenges and we can help you, too.