Well, mortgages will rise slightly too. That may spur a bit of a buying frenzy as people try to lock in lower rates.
Every time the Fed raises its rates the mortgage companies and others to include credit card companies will all raise their rates at least .25% and sometimes more.
Fed stands pat on interest rates, signals initial cut in $4.5T balance sheet to begin relatively soon. The Federal Reserve held its key short-term interest rate steady but signaled it likely will begin to reduce its massive asset portfolio in September. Ref. USAToday.
Yeah, it needs to do this so it has tools at its disposal if there is another recession. Right now there would be little it could do.
The reason the Federal reserve does anything is so that its private CEO and other officers make more money without the American people knowing about it. All you see and hear from the federal reserve is a smoke screen so the owners of this very private company can make more money.
Fed to cut $4.5 trillion bond holdings, still predicts a third rate hike in 2017. The Federal Reserve said it will shed a large portion of the $3.5 trillion in Treasury bonds and mortgage-backed securities it has purchased since the recession. The move could slowly nudge long-term interest rates higher. The Fed also foresees a third rate hike later this year but now predicts two hikes in 2019 instead of three. Ref. USAToday.
Fed raises key interest rate for 3rd time this year and 5th since late 2015; keeps forecast for 3 hikes in 2018. The Fed lifted its benchmark short-term rate by a quarter percentage point to a range of 1.25% to 1.5% and maintained its estimate of three rate increases next year despite low inflation as it boosted its growth forecast for next year to 2.5%. Monthly payments on credit cards, adjustable-rate mortgages and home equity lines are expected to rise in response to the rate hike. Ref. USAToday.
Fed raises short-term interest rates by a quarter point, which is likely to hike rates on credit cards and home equity lines of credit. With a downgrade to its economic outlook, the Federal Reserve raised its key short-term interest rate by a quarter point to a range of 2.25 percent to 2.5 percent but cut its forecast to two hikes in 2019 amid uncertain growth prospects. Ref. USAToday.