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https://www.google.com/amp/s/amp.cnn.com/cnn/2022/05/04/economy/fed-may-interest-rates/index.html
Stock markets in the United States rose on Wednesday as the FED announced a 500 basis point rise in interest rates and dispelled rumors of a 750 basis point rise.
The FED has hinted at as many as 6-intetest rate raises in 2022, and this announcement allayed some fears for investors. The increase in rates was the highest since 2000, and signals that low rates to borrow money are coming to an end.
Investors both large and small have been waiting for the other shoe to drop, as the FED is expected to raise rates precipitously to stave off inflation. Inflation clocked in around 9% in 2022, and the pain keeps coming.
The 10-year Treasury rare rose to 3%, and 30-year mortgage rates have risen to 5-6%. The interest rate rose enough to have some impact on adjustible rate debt, which puts more pressure on consumers with debt strapped budgets.
Fears of a sudden market crash as a result of higher interest rates which make money more expensive to borrow are being tamped down. The market has price higher than expected rate rises from the FED into their price, and so far things look better than expected. Expect the FED to raise rates several more times this year.
What should you do? I certainly hope you bought the REIT and divided stock dip. I would caution everyone with variable rate debt such as credit cards to pay them off before rates rise. I would also say that refinancing is off the table for now, as rates on mortgages keep rising. Since it will cost more money to borrow money, make sure your debt is low and you are keeping on top of your obligations. Companies will pay more to finance capital expenses, so stay a top performer at work.
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