It seems that most of the markets are just waiting to see what the Fed will do, however it also looks like the Fed is waiting on the markets to move in a way to allow them to raise interest rates.
Video on Possible Fed Rate Hike
With all the negative news coming out of Syria regarding the Russians and the USA clashing on what is actually needed in the Middle East, we can expect the 30 year rates to stay lower for a while even if the Fed does raise short term interest rates, as investors will keep their money in safe US Bonds, until this all gets resolved.
Raising short term rates will mostly affect people who have an “Home Equity Line of Credit” (HELOC) usually it’s that adjustable line of credit that we have as a 2nd on our homes.
If and when the Fed raises rates, it will only help the banks in this case, as it will cost homeowners more every month and the banks will make more on the loans they already have out there.
If they raise them quickly like they did in the early 2006’s then we will see a slowing of the economy again as people will just have less money to spend,
It will also cost business to borrow capital which will ultimately require them to cut back on expenses (layoffs) or raise prices to stay in business, again hurting the average person trying to put their kid through school or just keep up with the normal bills.
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