Friday, June 30, 2006

Interest Rate Hike

The Federal Reserve Board has hiked rates for the 17th consecutive time over the past two years, bringing the Fed Funds Rate to 5.25%.

But what was most important about the news was the wording of the policy statement, saying that "economic growth is moderating...and inflation expectations remain contained...yet the Committee judges that some inflation risks remain."

So what does this mean? The fact that inflation expectations remain contained is good news for long-term bond investors and fixed home loan rates, but it's not clear if the Fed hikes are done quite yet.

And the Fed Funds Rate does directly impact many other rates, including Adjustable Rate Mortgages and Home Equity Lines of Credit. And although those programs probably saved you a bundle over the past several years of low interest rates – times have changed, and it’s likely time to give your whole financial picture a once over and see if any adjustments are needed.

If you need an introduction to a loan officer, contact us or visit our website. We know experienced, knowledgeable people who you would benefit from knowing.


At 6:49 PM, Blogger va beyatch said...

Hell yea! Hike that puppy up! I'd rather have a 10% mortgage rate on a low price versus a 5% mortgage rate on a high price. Lower price means I get to pay it off quicker, as well more writeoff for the taxes!

Also, this may help clear out some of the subprime borrowers who helped run the market up the tree. The prices need to come back into line with the salaries of Hampton Roads.

I too now have my own blog, called ... link me and I'll link you :-)

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