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Rising Interest Rates Could Affect Some Home Owner Loans


An economist says the moves recently made by the Federal Reserve could eventually impact interest rates when we borrow money.

Last month, the Federal Reserve raised short-term interest rates a quarter of one percent, reflecting signs that the economy was growing and to slow inflationary pressures.

Economist David Clark works with Wisconsin Realtors. He says the 'Fed' would like to raise rates another 3/4 percent over the course of 2017. Clark says after this year's increase, they would like to raise it by a full percentage point in 2018. He says the increases could impact certain types of loans...

"..those long-term rates that have escalator clauses in them. Short-term rates obviously will obviously move up when those short-term rates increase. A lot of people with home equity loans for example, those rates will be affected. It's almost certain to have some impact on the 30-year mortgage...."

Market analysts have warned that if President-elect Trump and the Congress agree to slash tax rates and increase spending in areas such as infrastructure the Fed could be forced to raise rates faster than expected to counter rising prices.

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