Entry Title

The Fed Strikes Back

Fed Rate: the interest rate that is set by the Federal Reserve, click here to learn more 

The Feds got together yesterday and as expected they raised the rate from 0.50% to 0.75%. As mentioned in previous post, this was expected, but what does this mean for us Orcas, we are going focus on three main interest rate sensitive categories mortgages, saving accounts, and the market. 


•Always sensitive to rate changes

•Variable rates and fixed rates on new mortgages are up

•That 0.25% rate hike would equal to roughly an extra $29/month on a $200,000 loan with a 30-year term

Savings Account 

Now you would think saving accounts would be affected by interest rates as well, but remember a savings account is essentially a way for banks to hold your money to be able to spread it around to more customers, so they adjust their rates based on the need to hold more money not necessary the fed rates. So, sadly no saving accounts are not expected to  rise from .06% anytime soon.  

The Market

The market usually reacts negatively to a raise in fed rates in the short run, but in the long run its never anything to be too concerned about, this is simply investors being hesitant in the initial rise but common sense then creeps in a day or two later. 

Overall the Fed rate raise was something that we all saw coming and was due for a while, overall this is a good sign as it shows that the Fed has confidence in the economy and there is less need for incentives to keep the economy going. We will see what the Feds do in early 2017 with our new administration taking office. Orca will be ready swimming by your side in 2017! 

Have a questions? Contact Us 

Subscribe to stay up to date on all things Orca

Related Posts