The Fed says it’s finally seeing improvements in inflation, but in the meantime, interest rate hikes are still affecting the way Americans borrow, spend, and save.
Centennial Wealth Financial Advisor Jon Torbet in Traverse City says as interest rates are rising, we’ll continue to see higher mortgage rates and higher rates for home equity lines of credit. That extends to car loans, credit cards and more.
“As interest rates have risen, you’re going to continue to probably see these higher mortgage rates, whether it’s for new homebuyers or refinancing. You see it as well with like a home equity line of credit. Interest rates are bumping up. And so you want to be make sure that whatever that higher cost is, is going to fit into your overall budget,” he says.
On the flip side, rate hikes are good news for savers, investors, and retirees relying on savings. With rates on money market accounts and CD’s also ticking up.
Torbet says, “with this higher interest rate environment, you may have seen that some of the different savings accounts, money market rates, CD rates have come up. And so there’s attractive options now for those of you that have money set aside in savings - where you can get a better return on your money without the risks involved.”
Wall Street responded well to the Fed’s rate hike, rising to its highest level since the summer. The S&P 500 is up 1% on Wednesday, the NASDAQ jumped 2%. The Dow also rose slightly.
You can get retirement tips every week with “Retiring Well” from Centennial Wealth Advisory, on Sunday mornings at 11:30 on 9&10 News.