How does Fed interest rate forecast affect you?

In the century since it was created to serve as the nation’s central banking system, the Federal Reserve has often operated with an Oz-like aura of mystery.

Just obtaining a basic interest rate forecast seemed incredibly daunting behind this apparent cloak of secrecy.

Now, all eyes are on the great and powerful Fed once more, as the question of when it will act to raise interest rates is a prime conversation topic from corporate boardrooms to kitchen tables across America.

Forecasts suggesting that an interest-rate uptick lurks just around the corner have spurred a spike in speculation about what it all means – especially regarding second mortgages and first-time home purchases.

As news outlets and talking heads compete to feed us new angles on the Fed, many financial advisers agree that if you are on the fence about buying or refinancing, now is the time to act.

Yet there is much to consider. Many interest rate forecasts agree that the size of the increase will be relatively small (perhaps one-quarter of a percentage point).

But the timing of such a move is always a moving target, as armchair analysts scrutinize Fed Chair Janet Yellen for clues.

Until recently, some were counseling consumers to expect a bump before year’s end. However, citing recent fluctuations in the U.S. stock market and upheavals in the Chinese economy (or what the Economist is calling “The Great Fall of China”), Fortune offered this recent forecast: “5 reasons why the Fed won’t raise interest rates in 2015.”

Amid all the uncertainty, there is at least one sure bet: You are wise to gather as much solid, credible information as you can.

Some of this homework can be done online. In fact, there is every reason to believe that “interest rate forecast” will be among the top keyword searches of the season – right up there with “Kim Kardashian” and “Kim Kardashian’s interest rate forecast.”

After the economic crash of 2008, the Fed reduced interest rates to record low levels of near zero percent. Now it must determine if the economy is performing well enough to raise rates to more normal levels.

“Officials are now debating whether the economy is strong enough to start raising rates. When the Fed does move, the cost of borrowing and the return on savings are likely to start climbing too,” explains the New York Times. “Mortgage rates are also likely to rise…most experts expect long-term rates to rise in coming years, increasing the cost of homes and cars.”

Of course, you probably also want to have a real conversation with someone who knows how to help you peek behind the curtain to help you stay one step ahead of the Fed.

At Blue Water Mortgage, our trusted team of brokers makes it their business to understand how national economic policy and a host of other factors affect your bottom line – particularly with regard to first-time home buyers, second mortgages and other refinancing.

With over 150 years of collective financial industry experience, our loan officers are skilled at taking the stress out of an often-stressful process by leveraging industry knowledge and relationships with a range of lenders to connect you with the best deal.

Contact us today to find out how we can help.

Roger Odoardi

Roger is an owner and licensed Loan Officer at Blue Water Mortgage. He graduated from the University of New Hampshire’s Whittemore School of Business and has been a leader in the mortgage industry for over 20 years. Roger has personally originated over 2500 residential loans and is considered to be in the top 1% of NH Loan Officers by leading national lender United Wholesale Mortgage.