Quote:Not really... yet.  Stocks ended up pretty much flat today and I don't expect a lot of upward movement this month.  The Fed (Janet Yeldon) signaled another rise in interest rates.  The question is, how much of a rate increase?  My bet is that it's going to be a .25% increase at the most.  The market is due for a correction, and we'll probably see that.  Overall the stock market is going to dip down slightly, then resume the upward climb.

 

What does that mean for the average consumer?  Well, interest rates on new mortgages will be slightly higher as well as the interest rate on large purchases such as a new vehicle.  Right now at my credit union a loan on a new automobile could be had for as little as 1.79%.  Expect that number to jump up to around 2% shortly.  The same could be said about mortgage loan rates.  Right now at my credit union the rate is around 4.5%, expect that to go up to around 5%.

 

While small percentage points probably don't mean a lot to the average person, it is pretty significant when buying a home or making a larger purchase such as a vehicle.

 

On the "flip side" for savers, it also means that you will earn just a little bit more in your money market or savings accounts.  My current money market account only pays .50% on my money.  that should move up a bit higher and give me a slightly better return.

 

So to recap, it's going to cost you more to borrow money for a new house or a new vehicle.  Some people call this a "recession".  Yet, if you actually save money and/or invest it you will earn a better yield.