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The fed raised rates this week

December 18th, 2015 4:53 PM by Jonathan White

The Federal Reserve has raised its federal funds rate by a quarter of a percentage point for the first time since 2006. The most immediate effect will be on short-term interest rates such as adjustable rate mortgages and home equity lines of credit.  The Fed can control short-term interest rates, but it can’t control long-term interest rates. 

Long-term rates are affected in part by the inflationary expectations of investors in the marketplace and, in general, mortgage rates will increase if the economy improves.

Regardless of this rate increase, interest rates continue to be at historical lows and the Fed reported that any additional increase would be gradual.

Posted by Jonathan White on December 18th, 2015 4:53 PM


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