Well, I suppose all good things must come to an end. That is, unless Donald Trump stacks the Fed and the current Federal Reserve policy of incremental rate increases are put on hold. But, then again, that’s a discussion for another day. For today – or rather tomorrow- the Fed will increase rates and thus generally impact the cost of borrowing across the board – although there isn’t a one for one correlation with an increase in mortgage rates.
And while the Fed is moving more gingerly now than in the past in tightening monetary policy, it is still moving inexorably in the direction of rate increases, with two additional increases discussed after tomorrow’s increase, later this year. The underlying motivation for these changes is based on a consensus that the economy is strong enough to withstand these increases. As noted in the article, the Fed believes that the economy is nearing its full economic potential plus inflation is moving towards the Fed’s 2% target. What remains to be seen, however, is how raising rates will affect President Trump’s stated economic goals and if he will take action to undermine the Federal Reserve’s independence.
Read the full article here: Easy Money is Ending, People
