Recently, Federal Reserve Chairman Janet Yellen signaled that the Federal Reserve would likely raise rates multiple times this year. Just last month, interest rates bumped a quarter of a point from between 0.25 and 0.5 percent to between 0.5 to 0.75 percent. While this is a very small increase, the change indicates that the Federal Reserve will make good on its promises.
Yellen’s recent statements and Federal Reserve action signal an end to its economic stimulus campaign that was put in place over eight years ago during the financial crisis. In fact, these changes, according to Yellen, are expected to bring the benchmark borrowing rate close to neutral.
So what does this mean for consumers? So far, we’ve seen modest short-term implications. Interest rates on auto loans and some credit card debt have experienced increases; however they remain at low levels compared to historical norms. 30-year mortgage rates have also remained consistent for the most part. Continue reading