That will be the biggest deal for sure March 8, 2017Posted by hslu in Debt and deficit, Economics, jobs.
Tags: Federal Reserve balance sheet, FOMC, mortgage interest rate
Higher interest rates are coming thanks to a tighter Fed.
Prime rate will be higher, mortgage interest rate will rise, U.S. dollar will strengthen and interest payment on national debt will gradually take up more of federal government’s tax revenue after FOMC’s highly anticipated move next week.
If the U.S. economy continue to pick up strength and labor force begin to tighten in the coming months, pretty soon we will see 4% handle on the long bonds. But the biggest deal will happen when the Fed begins to shrink its huge fixed income assets on its balance sheet, currently at $4,458,018 million as of March 1, 2017.
You want to buy or sell your houses before it hits the market. Otherwise, you will see a bear market on housing for as long as eye can see into the future.
Believe me, that will be no fun at all if you are facing a market with 6% to 7% mortgage interest rate.