THE FED RATE HIKE: HOW MUCH DOES IT REALLY MATTER?

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It may seem counterintuitive, but when the Federal Reserve finally gets around to raising interest rates, the impact on mortgage rates should be negligible. After all, the last time the Fed was hiking, from mid-2004 to mid-2006, mortgage rates rose only a small amount, half a percentage point.

Federal Reserve Chair Janet Yellen has signaled that the central bank plans to soon boost the federal funds rate -- which banks charge each other to lend funds -- likely at its next meeting in December. After that, she has indicated that the Fed will increase the fed funds rate only gradually, perhaps a quarter-point at a time.

A higher fed funds rate, now near zero percent, will have an immediate effect on other shorter-term rates, like those for credit cards and auto loans.

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Keith Kaplan

CalBRE #01933707
Sothebys International Realty
9255 Sunset Blvd.
West Hollywood, CA   90069

keith.kaplan@sothebyshomes.com

310-646-7791

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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