Savers Rejoice!

federal-reserve-seal

Your time has come. After nearly a decade, long suffering frugal people are on track to be rolling in the though again. Not exactly, but pretty much. Sorta… Yesterday, the Washington Post reported that the Federal Reserve raised interest rate by another 0.25%. Just to be clear, the FRB does not set interest rates. However, their rates drive consumer rates because Fed rates are often used as a benchmark for overall market interest rates. Although rates on deposit accounts are not going to go up as quickly as borrowing rates, us savers are one step closer to escaping the 0% interest rate of money market accounts.

In case you were thinking that 0.25% is small, I’m going to put this in perspective for you. The first rate hike since 2007 was in 2015. The next one was in 2016 and this hike is following 3 months later. This could potentially be setting the ground work for 2 more rate increases this year. The interval between hikes is shortening.

For those of you who are still borrowing, especially those who still have ARM on their balance sheet, be careful to not get caught with your pants down…

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