MARKET COMMENTARY – Federal Reserve Raises Key Interest Rate

Today the Federal Reserve raised interest rates for the first time since June 2006. In our opinion, this is good news and a signal that the economy is healthy. While the interest rate was increased by 0.25%, rates remain historically low. The FOMC stated that they will continue monitoring the labor market, inflation, global markets, etc. in order to decide when the next rate increase should occur and by what size. So what does this mean for you?

  • Yields on bonds will likely be higher
  • You will likely earn better interest rates on the funds in your savings account
  • You will likely pay a little more interest on debt with variable interest rates
  • Your interest payments will remain the same for any debt with fixed interest rates
  • The Fed is finally signaling the economy is healthy and can withstand higher borrowing costs

If you have any questions, please do not hesitate to contact our director of investments, Jeff Asher, or any member of our Heritage team.