Borrowing Costs Climb Along With Fed Rate Increases

Borrowing costs for consumers have risen as the Federal Reserve continues to tighten monetary policy. Freddie Mac says the average fixed rate on a 30-year mortgage was 4.54 percent in early June, up from 3.95 percent in early January. The Federal Reserve announced another quarter-percentage-point increase on June 13 and could make at least an additional move this year. Average five-year rates for a new-car loan rose last week to 4.71 percent, the highest level since early 2012, according to Bankrate.com. Average annual percentage rates on credit cards and average rates for home equity lines of credit both have reached their highest levels since before the 2008-09 crisis, Bankrate says. Economists say rising wages, low unemployment, and the recent tax cuts are likely to ease the impact of higher borrowing costs. But some individuals are already feeling the squeeze, especially in markets where housing prices are also rising.

Wall Street Journal (06/13/18) Paul Kiernan

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