Yesterday, the Federal Reserve raised interest rates by 0.25 percentage points to a range of 0.50 percent and 0.75 percent, signaling a strengthening US economy.
We anticipated this hike, as did the stock market, which has already priced in a December rate hike. For many, this has not come as a surprise. The Fed is data-dependent, and employment has improved, GDP was better than expected and consumer confidence is strong.
For consumers, you will not see a change in your day-to-day financial lives. If you’re purchasing a home in the coming months or have variable rate loans, you may want to consider locking in a fixed rate now since the Fed indicated that an aggressive path for rates might be ahead. Essentially, we are still at historically low interest rate levels and now is still a good time to make large purchases on credit – like home purchases.
If you have any questions regarding today’s rate hike, please do not hesitate to call your advisor.