Against everyone’s predictions, the Federal Reserve has decided to raise interest rates in the recent December Federal Reserve meeting. It was also mentioned that Fed may plan to raise interest rates three times in the year 2017. In my previous post (Why Fed Decides Not to Increase Interest Rate), I mentioned one of the factors Fed decided not to raise interest rates in the previous meeting was the Presidential Election. It seems that the Trump victory did not have any impact to the decision made by the Fed.
Chairwoman Janet Yellen cited higher inflation and a lower unemployment rate were reasons Fed decided to raise the interest rates.
What I think will be the Impact of Fed Interest Rate Hike
#1 Higher Mortgage Rates
By raising the interest rates, the Federal Reserves makes it more expensive for banks to borrow. Banks in return may pass the higher costs …