US Fed Hikes Interest Rates Amid Inflation

[Economy 53,112]

https://www.google.com/amp/s/www.cnbc.com/amp/2026/09/16/fed-rate-decision-september-2026.html

 

The US Fed has raised interest rates by 0.25% and hints another one may arrive by year end.

 

Inflation amid high oil prices and to a lesser extent tarrifs are playing a role on inflation

 

Though not mentioned in this article or by the fed, most experts agree high butget deficits are also inflationairy

[Bronco 27,807]

Trump has spent his whole term fighting the Fed via legal and illegal means to try and get a rate cut. 
Finally has his hand picked man in charge and he puts the rates up xD 

[MountainMonster 2,833]

I wanna buy a new house soon. These interest rates are terrible. but so is everything else.

[AsleepOnTheCeiling 7,000]

2 hours ago, MountainMonster said:

I wanna buy a new house soon. These interest rates are terrible. but so is everything else.

Mortgage rates aren't directly tied to the feds interest rates. Plus the anticipation that interest rates will go up is what moves mortgage rates up, not the actual increase. What affects mortgage rates more is inflation, which is what an increased interest rate is meant to fight. So if oil were to come down then interest rates and inflation could come down and in turn so would mortgage rates. 

[NewEnglandWitch 222]

21 minutes ago, AsleepOnTheCeiling said:

Mortgage rates aren't directly tied to the feds interest rates. Plus the anticipation that interest rates will go up is what moves mortgage rates up, not the actual increase. What affects mortgage rates more is inflation, which is what an increased interest rate is meant to fight. So if oil were to come down then interest rates and inflation could come down and in turn so would mortgage rates. 

This is sorta and not really true. Increases to the rate by federal reserve do in fact increase cc rates and loan rates because they’re calculated based on the prime rate. The point is to cool the economy further. 

[Economy 53,112]

2 hours ago, NewEnglandWitch said:

This is sorta and not really true. Increases to the rate by federal reserve do in fact increase cc rates and loan rates because they’re calculated based on the prime rate. The point is to cool the economy further. 

 

2 hours ago, AsleepOnTheCeiling said:

Mortgage rates aren't directly tied to the feds interest rates. Plus the anticipation that interest rates will go up is what moves mortgage rates up, not the actual increase. What affects mortgage rates more is inflation, which is what an increased interest rate is meant to fight. So if oil were to come down then interest rates and inflation could come down and in turn so would mortgage rates. 

This is an interesting chicken and the egg problem

 

In theory Central Banks are supposed to set the trend on rates, but some argue markets are so forward looking and always price moves before they even happen so that in reality it is actually the Central Banks keeping up with the market not the market keeping up with Central Banks

 

I personally think theres a bit of truth to both tbh.

 

One thing is for sure, fixed mortgages follow bonds not the official Fed rate. Tbe Fed could lower rates to 0, if inflation expectations remain and concerns in deficit remain the impact in bonds would be limited and their power to lower things like mortgages would in fact be quite limited especially the way the credit market is structured

 

Here in Canada variable rate mortgages and short term fixed are way more common than in the US, so here the Central Bank rates actually have more direct impact on private lending rates

[MountainMonster 2,833]

How about we just agree that its all terrible?

Edited 3 hours ago by MountainMonster