Now the question is: When will the Fed raise rates? According to my colleague Russ Koesterich, the consensus at this point appears to be at one of its next meetings, in June or September.
So rates are going to rise. Now what?
Generally, higher interest rates translates to less money available, which means if you’re borrowing money, you’ll have pay more to do so. Homeowners and home buyers won’t be able to borrow money at the low levels to which they’ve become accustomed. It’s also going to be more expensive to get any type of car loan, something I discovered last weekend. And, if you’re invested in any bonds, the value of those bonds will decrease; bonds in the middle of the yield curve (two to five years) will likely be hit the hardest.
Do you have a question about interest rates or investing? Ask it here. And stay tuned for my next post, where we’ll discuss responsible investing.
Ann Hynek is the Global Editor of The Blog, writing about investing from a millennial perspective. You can read more of her posts here.