5 things on what to do about the highest interest rate in 15 years?
In a continued bid to tame decades-high inflation, the central bank may keep pushing rates higher next year, too, albeit at a more modest pace. On Wednesday the Fed Fund rate raised for the seventh time in a row, to a range of 4.25% to 4.5%. That is the highest it’s been in 15 years.
That, of course, means higher borrowing costs for consumers. But it also means your savings may actually start earning a little money after years of barely-there interest.
Overcoming higher interest rates:
• Bank savings: Shop around
• Home loans: Lock in fixed rates now
• Overall portfolio: Seek broad exposure and pricing power
• Some stock plays: Commodities are a good hedge given the uncertainty
• For bonds: Go short
The real danger will be with the continuous rise in interest rates and yet the dollar starts weakening, just like the pound. The dollar is trading lower in the past weeks, I am keeping watch on this closely. However, it is not all bad news, we can invest differently…
$Micro 10-Year Yield - main 2212(10Ymain)$ $Micro 2-Year Yield - main 2212(2YYmain)$
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