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How does the federal funds rate impact long-term interest rates like a mortgage?
The federal funds rate does not directly impact long-term interest rates like a 30-year, fixed rate mortgage. Just because the fed funds rate increases, does not mean the cost of a mortgage will do the same. Long-term rates are influenced by…
Why does the Fed raise or lower the federal funds rate?
Typically, when the Fed is less confident about the health of the economy, rates go down. It then becomes cheaper for banks to loan money so people borrow more and spend more. In 2008, the Fed slashed rates to virtually zero. When the Fed is…
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