The Feds Raised the interest rates?!?!

Quick Summary,

The Federal Reserve raising interest rates just means that bank lending to the mass population will slow down. So if you have cash and you are looking to buy a home or a car you have less competition! This means you can haggle a better deal. This is also true for smaller priced items like electronics etc.

Bond rates will lower. Bonds follow the market, so when interest rates go up, Bond prices go down. People always claim that bonds are solid investments, but I don't fully understand that claim since interest rates will go up in the future. Scary time to invest in bonds since interest rates can't really go any lower. Do your own research, don't just take my advice.

The sky is not falling unless you are in debt and were counting on a lower interest payment on your loans. Aside from that, this post is just another reminder that Cash is king! I am going to post a series of blogs that explain all the benefits of a debt free lifestyle in the future. Stay tuned!




Bond loss due to raising rates.
Here’s a breakdown of the losses by various bond maturity ETFs: You can see that long bonds saw the biggest losses by far, while short-term bonds barely budged from the rise in rates. This also makes sense from the perspective of the current yields and trailing 5 year performance numbers:


Source 

Further Reading:Bond Returns & Rising Interest Rates



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