As predicted, the Federal Reserve just raised the benchmark Federal Funds rate, upping its target range by 0.25 percent (25 basis points) and signaling expectations for another quarter-point increase by the end of the year.

The Fed dropped the benchmark rate 5 percentage points between August of 2007 and the end of 2008, a move which helped drive mortgage rates down to an all-time low of 3.31 percent in 2012. The Fed has since raised its target rate by 1.0 percent.

The average rate for a 30-year mortgage dropped back under 4 percent three weeks ago with the probability of today’s hike already priced-in.

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Comments from “Plugged-In” Readers

  1. Posted by Keepitup

    Dumb.

    Let’s wait and see how many major cities across the country declare BK over the next 6 months. Most are getting crushed under the weight of their unfunded pension obligations. SF is no exception.

    Let’s see how many GM and Ford production plants are furloughed and employees lay off over the next three months. Their unsold inventory is staggering and the Fed could care less (GM Extends Plant Shutdowns As Toxic Trifecta For Auto Loans Fuels Carmageddon…GM Extends Summer Break Amid Industry Slump, Growing Glut)

    I’m sure raising interest rate will help a lot…not.

    • Posted by Sabbie

      Could unfunded pension obligations be a result of years and years of zero interest rates? Hmm…

      • Posted by Notcom

        The decimation of income for those most dependent on interest income – which in addition to investment funds includes a large percentage of elderly persons – has been one of the most ignored issues of the free money era. Of course the Helicopter Crowd assures us that the Market, not the Fed, sets interest rates, so the policies are blameless….they only affect interest rate in a good way, it seems.

      • Posted by Keepitup

        I’ll let the experts pontificate on the mounting pension calamity in our mists. To quote Bill Cross: “The pension problem is often attributed to low returns on assets. As Bill Gross frequently points out, low interest rates are the enemy of savers and pension funds have some of the biggest savings accounts around.”

        • Posted by BHG

          Seriously? linking a ZeroHedge rant? 🙁

          • Posted by Keepitup

            Maybe this little diddy (rant) from the MSM (aka Fake news) regarding the approaching pension fiasco will convince you that raising interest rates might be a dumb move on the part of the FED.

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