December 15th, 2017 6:52 AM by Scott Fenner
The Fed increased rates at their most recent meeting. They also
indicated they will likely raise rates three additional times in 2018. Please
read on for more:
First, who is the Fed
and what do they do?
The Federal Reserve Board (the Fed), controls the Fed Fund Rate and the
Discount Rate. These are charges for overnight loans from bank to bank or from
the Fed to member banks.
What does an increase mean for regular people?
• It could cause banks to increase their “prime rates,” which are often used to
calculate interest on consumer products like credit cards and home equity lines
of credit (HELOCs).
• Mortgage rates are long-term rates and
not directly controlled by Fed rate changes. However, mortgage rates are
influenced by Fed policy, and rates can rise in anticipation of future Fed
action. There are exceptions, yet home loan rates will typically follow overall
interest rate trends over time.
Upcoming change in leadership at the Fed:
In January 2018, the current Fed chair, Janet Yellen, will step aside for a new
chair, Jerome Powell. Time will tell whether this transition will impact
Here’s what we know:
With the uncertainty, I’m tracking the changes carefully and am happy to keep
you informed whenever you like.
you for allowing me to provide you updates on industry news. Please reach out
if I can answer any questions for you or help with financing (or refinancing)