High interest rates could be the new reality for Americans
Cresset Capital CIO and founding partner Jack Ablin discusses higher interest rates and offers his market outlook on 'Barron's Roundtable.'
The Federal Reserve signaled during its two-day meeting last week that interest rates will remain elevated for some time, bringing to an end the era of ultra-cheap money.
Americans will be forced to adapt to a new normal where savers benefit from higher rates, but borrowers face steeper debt payments on everything from credit cards to mortgages to student loans.
«Whether the Fed does or doesn’t raise rates further in the coming months, the high rates are here to stay for awhile,» said Greg McBride, chief financial analyst at Bankrate.
Policymakers voted during their policy-setting meeting to leave interest rates unchanged at a range of 5.25% to 5.5%, the highest level since 2001. But officials also opened the door to another quarter-point increase before the end of the year – and indicated they will hold rates at those elevated levels for an extended period of time.
INTEREST RATES ARE HIGH. HERE HOW YOU CAN TAKE ADVANTAGE OF THEM
Federal Reserve Chair Jerome Powell speaks during a news conference in Washington, D.C., on March 22, 2023. (Al Drago/Bloomberg via / Getty Images)
New economic projections laid out after the meeting indicate the U.S. central bank will not cut interest rates until 2024, to a rate of about 5.1%. Officials projected they will eventually lower rates to 2.9% by 2026, and hold them at 2.5% in the longer run.
«The forward guidance from the FOMC’s policy statement and its updated macro and interest rate forecasts indicates an ongoing hawkish policy stance and a higher-for-longer rate path,» said Kathy Bostjancic, Nationwide chief economist. «The reason is that
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