Record-low interest rates will be around for at least a few more months, the Federal Reserve made clear Wednesday.
Enjoy the easy money while it lasts.
By
mid-2015, economists expect the Fed to abandon a nearly 6-year-old
policy of keeping short-term rates at record lows. Those rates have
helped support the economy, cheered the stock market and shrunk mortgage
rates. A Fed rate increase could potentially reverse those trends.
Mortgages could cost more. So could car loans. Investors could get squeezed.
"Borrowers
should see the writing on the wall," said Greg McBride, chief financial
analyst at Bankrate.com. "Interest rates are eventually going to go up.
They should pay down variable-rate debt and keep an eye on that
adjustable-rate mortgage. They don't want to be caught flat-footed."
Investors,
in particular, might recall that mere speculation about the end of the
Fed's stimulus shook global financial markets in May 2013. In coming
months, as the prospect of higher rates nears, traders might once again
dump stocks and bonds and send prices tumbling.
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