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Feds Hike Interest Rates – Pros and Cons

Ying and Yang of Events shows Pros and Cons of things that happen in the Market. How do these provide benefit and to whom vs who will it hurt and how?

FederalInterestRates Hike Again

Potential Hurts

More Expensive To Borrow 

  1. Impact on Borrowers from all areas. 
  2. Other things to think about - Natural Disasters will drive Construction materials and labor costs higher. 
  3. Assessments and Taxes?
  4. Less Purchase Power due to increased rates
  5. People may invest in other areas vs Real Estate. 
  6. Lower Home Buyer purchasing Power.  
  7. Luxury Market vs First Time Buyer impacts. 
  8. International Buyer impacts
  9. Sellers may have to lower prices. 


Potential Benefits

Better rates on high-yield certificates of deposit.

  1. Higher Returns for Savers - Bigger Payouts from their accounts especially certificates of Deposit. This is especially good for people on Fixed Income.
  2. Tamed Inflation: Central Banks target is 2%
  3. More Lending
  4. More interest income for retirees
  5. Stronger Dollar to Boost purchasing Power.  
  6. Stocks will trade on fundamentals
  7. Would be homebuyers may get off the fence

https://www.bankrate.com/banking/federal-reserve/7-surprising-benefits-of-higher-interest-rates-from-the-federal-reserve/