Fed Leaves Fed Funds Target Rate at 0 to 0.25%, but Pencils In Two Hikes for 2023
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Fed Leaves Fed Funds Target Rate at 0 to 0.25%, but Pencils In Two Hikes for 2023

The Federal Reserve today continued with its current rate stance and its current bond buying program, but is now indicating that it will back away from these easy-money policies in 2023 as inflation surges and growth accelerates.

While rates are not going up immediately, this means that investors should begin to prepare for higher rates over the coming years.

Preparation for higher rates should involve continuing to seek out the best savings rates on cash. Rates on fixed income investments will begin to rise as we get closer to the Fed’s move, and certainly if the Fed is forced to advance its timeline due to continued inflation. As a result, Investors should be very cautious about fixed income investments and avoid CDs longer than one-year.

Even though today’s move likely guarantees that borrowing costs will remain low for products like mortgages and home equity for another year, if you are considering remortgaging or taking out home equity loans related to properties you currently own, this would be a good time to check rates.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding BestCashCow in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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