San Francisco Federal Reserve Bank President John Williams recently alluded to a rate hike at the Fed’s upcoming meeting in December. He said, “this year would be good for a rate rise”, and he wanted the rate hike to be implemented last month. What does a rate hike mean for the economy and the average American? Higher rates mean that the cost of borrowing increases for both corporations and individuals. On the contrary, higher rates also lead to higher returns for investors. If the Fed raises rates in December it means that they feel comfortable with the jobs and growth of our economy, and by raising rates inflation is kept in check.
By: Jonathan Frieling