For the first time in a while, community bankers heard something new: The Federal Reserve has stuck to its forecast of rate hikes for 2017 with another quarter point increase in the key short-term interest rate.
Additionally, the Federal Reserve announced a plan to finally reduce its balance sheet in order to provide for an increase in the long-term rates. That last sentence is a milestone for the Federal Reserve and points to an economy that is the strongest it has been during the recovery from 2008. The rate increase represents the second in 2017 and the third since December 2016. Finally, what every community banker wants to hear: the rate hike will have an effect on borrowing costs by increasing variable rates for credit cards, HELOCs and ARMs.
For more information, please read “Fed Milestone: Central Bank Raises Rates, Plans to Shrink its $4.5T in Assets” written by Paul Davidson, USA Today
For additional information or assistance please contact James Dowling, MBA, and Assurance Manager in the Financial Institutions Industry Group.
This commentary represents the unique views of James Dowling, and is not representative of Marcum LLP, its partners or its employees.