[–] coles-law 0 points 1 point 1 point (+1|-0) ago
Can someone correct me if I'm wrong? What I suppose this means:
Raising rates makes borrowing harder so buying houses and refinancing mortgages are more costly.
Raising rates also decreases money supply because loans are harder to come by. Any foreclosure spree / calling in loans will contract the money supply further.
When the money supply is lowered, the economy shrinks because there is less liquidity between producers and consumers. This causes a recession or depression depending on the severity of the contraction. Markets like housing and stocks will follow, accelerating the decline.
[–] heretolearn 0 points 1 point 1 point (+1|-0) ago
can we please get rid of the fed reserve already
[–] derram 0 points 2 points 2 points (+2|-0) ago
https://archive.is/yEtrm :
'U.S. Mortgage Rates Jump to More Than 2-Year High After Fed HikeU.S. mortgage rates rose, with the 30-year reaching the highest level since April 2014, after the Federal Reserve increased its benchmark lending rate. '
'Federal Reserve policy makers last week rose interest rates for the first time this year and projected more increases for 2017 as the economy strengthens. '
'The average rate for a 30-year fixed mortgage was 4.3 percent, up from 4.16 percent last week, Freddie Mac said in a statement Thursday. '
'The average 15-year rate climbed to 3.52 percent, the highest since January 2014, from 3.37 percent, the McLean, Virginia-based mortgage-finance company said. '
'The 30-year mortgage rate rose 14 basis points to 4.30 percent, reaching highs we have not seen since April 2014.”Before the election, the average rate for a 30-year loan had been below 4 percent all year and was hovering near a record low. '
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