Fed Hikes Interest Rates Again
Below is a MRR and PLR article in category Finance -> subcategory Other.
Fed Raises Interest Rates Again
Overview:
Interest rates are climbing once more. How will Americans, already feeling the pinch, handle their holiday shopping? Will retailers need to dramatically cut prices? The situation is unfolding!
Key Topics:
Interest rates, credit cards, mortgages, car loans, debt relief, home equity loans, student loans
Article:
On November 1, 2005, the Federal Reserve (Fed) increased interest rates by a quarter of a percentage point. Since the summer of 2004, outgoing Fed Chairman Alan Greenspan has steadily raised rates from a low of just 1%. Now at 4%, Greenspan is expected to implement two more increases before stepping down in January 2006. The big questions are: Will higher rates curb inflation? Will the new Chairman follow Greenspan’s cautious approach, or will rates stabilize? Speculation is widespread, but one thing is certain: life's expenses are about to increase.
Impact of the Rate Hike:
- Credit Cards: Expect credit card companies to hike interest rates, sparing only their top customers. Rates of 12%, 15%, and even 21% are making a comeback.
- Mortgage Rates: Those with fixed-rate mortgages are safe, but if you have a variable-rate mortgage, be prepared to pay more?"especially if you haven't yet felt the impact of previous hikes.
- Car Loans and Other Loans: If a zero percent financing deal is available, seize it. Car loans, personal loans, home equity loans, and loan consolidations are all trending upward.
Coupled with high fuel prices and expected rises in medical costs, Americans are experiencing increased financial pressure. As the holiday season approaches, retailers may be forced to significantly reduce prices to entice shoppers.
For those not burdened by significant debt, the Fed's rate increase will have minimal impact. Everyone else, however, will feel the squeeze.
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