There is much talk about the anticipated interest rate hike from the Federal Reserve, but there seems to be little discussion on how this will affect consumers. A recent Wall Street Journal survey shows that more than 90% of economists anticipate the increase to take effect in the next six months.
To give you an idea of how a Fed rate hike might affect your finances, here are a few things you need to know.
- Mortgage. If you have a fixed-rate mortgage, you do not have to worry about a Fed rate hike. Adjustable-rate mortgages can expect an increase of up to 0.25%, depending on the actual Fed rate hike. The rates will be higher for new homeowners, however, as the increase takes effect. Consult a financial advisor in Northern Virginia, like AOG Wealth Management to determine how a Fed rate increase may affect your mortgage.
- Job market. According to NBCNews.com, since the unemployment rates are at a seven-year low, the Fed considers an increase to somewhat slow the hiring. This means that if the Fed raises the rate, the labor market will show enough recovery, which will put a slight brake on hiring. Nonetheless, because we are expecting only at least a .25% hike, it will most likely not show any significant change.
- Savings. While a Fed rate hike is normally a cause for concern, savers will find it beneficial. Investments can yield up to .25% on a one-year certificate of deposit. This is possible, as banks will allow a slower pace on savings products than loans or credit cards. Nevertheless, the best thing to do is to put your shopping on hold until a better offer becomes available.
- Bank fees and car loans. According to CNBC.com, bank fees and car loans are likely to get costlier during a fed rate hike. This is due to the new regulations on banking, which were designed to prevent another financial meltdown, like the one in 2008. What you can do is be aware of banks that increase fees on checking accounts and charge higher rates for car loans, credit cards, and home improvements.
To help your savings and investment decisions, work with a NOVA wealth management firm. Here, we serve small businesses and individuals. AOG Wealth Management offers ways to plan your asset and wealth strategies effectively. Our services include tax efficient investment strategies, home mortgage assistance, trust and estate planning, and more.
Our business is to help you achieve your financial goals. Call us today at (866) 993-0203 to learn more about our products and services.
Securities offered through TD Ameritrade Institutional Services located at 5010 Wateridge Vista Dr., San Diego, California 92121-5775. Investment advisory services offered through AOG Wealth Management, Inc. AOG Wealth Management, Inc. is neither an affiliate nor subsidiary of TD Ameritrade Institutional Services.