This Week in Real Estate 12-18-2015 - Fed Reserve raised rates

The Fed raised rates.

For the first time in 9 years the Federal Reserve raised the short term borrowing rate. It went from 0.00% to 0.25%. This increase has been talked about for 2 years. The increase had been delayed many times as well. Initially the thought was that rates would increase in February 2015.

But it happened. And guess what? The financial markets reacted by going UP more than 200 points on Wednesday.

"I feel confident about the fundamentals driving the U.S. economy, the health of U.S. households, and domestic spending," Fed chief Janet Yellen said during a press conference. "There are pressures on some sectors of the economy, particularly manufacturing, and the energy sector...but the underlying health of the U.S. economy I consider to be quite sound."

The Fed telegraphed it will be patient with future rate increases so as not to kill the economic recovery. The central bank's statement said the economy will only merit "gradual increases" in rates, which are likely to remain low "for some time." Yellen repeatedly said during the press conference that future rate hikes will be "gradual."

CNN wrote a great article talking about the impact of these moves.

http://money.cnn.com/2015/12/14/news/economy/what-a-fed-rate-hike-means-for-you/index.html?iid=surge-stack-dom

The Federal Reserve’s official press release

http://www.federalreserve.gov/newsevents/press/monetary/20151216a.htm

-Kris