The question du jour is how will the interest rates change as the Federal Reserve Bank welcomes Jerome Powell to the helm. Things are stable right now. Many indicators are great: unemployment is low, inflation is low, gas prices are steady, 401Ks are cranking.
No matter where you sit on the political spectrum you cannot deny that the economy is better than “pretty good.”
Ready for a few bumps in interest rates?
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As indicated at the December meeting, the Fed intends to raise interest rates three times in 2018. The last rate hike was the third in 2017 and the fifth since December 2015.
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As rates continue to increase, borrowers should take steps to reduce any debt they have with variable interest rates. For example, with credit card debt at an all-time high, it would serve account holders well to consider transferring some of their debt to a low-interest balance transfer credit card.
Bernanke boxed the country out of the recession; Yellen brought stability. Can Powell finesse the economy through the new Trump tax codes?
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Jerome Powell, who was recently confirmed as the next Fed chairby the Senate, will begin leading the Fed at the meeting scheduled for March 20-21. In terms of monetary policy, it’s anticipated that he will continue Yellen’s strategy. But moving forward, the central bank may be less shy about bumping up short-term interest rates.
As is the theme with most new years, now is a good time to take visit strategies, both in the household budget and in business planning.
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As indicated at the December meeting, the Fed intends to raise interest rates three times in 2018. The last rate hike was the third in 2017 and the fifth since December 2015.
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In addition to keeping an eye on the labor market and inflation, the Fed will eventually be taking note of whether other factors, like politics or concerns about NAFTA and North Korea, could have an impact on economic activity, Baumohl says.
Credit policy groups: start bracing for rising rates with more conservative parameters, just in case.
And, consumers, think debt paydown before rates rise.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group
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