Too hot, too cold or just right?

June 29, 2006

The Federal Reserve raised U.S. interest rates for a 17th straight time on Thursday and said more rises may be needed to curb inflation. The financial markets have already almost fully priced in another interest rate hike in August.

The Fed’s benchmark rate sets the base for a range of U.S. interest rates, including mortgage rates. Are higher interest rates crimping your spending? Post your comments below.












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I had a variable rate mortgage, and at 5.1, my payment was 756 a month… by the time I got into a fixed conventional, my payments are now 1450 a month.. now that’s more than 700 bucks a month I can’t spend… that’s an obvious damper on extra activities… the result, we stoy home a lot more now, we chose not to launch our modest boat, and we pretty much just live on our income…

Posted by Bill | Report as abusive

The interest rate increases over the last year are killing me. Like the first poster, I had an ARM that I just switched to fixed because my payments are costing me $12,000 a year more this year than last year. Couple that with no raise in 4 years “because of the economy”, pff!, and I’m counting the minutes until the next paycheck.

Posted by Al | Report as abusive

After being off work due to illness, we had mounting debt and late payments. Mortgage payments were behind and we could have either filed bankruptcy or lost the house. We refinanced with a subprime rate at a ridculous 8.9% (previous 7 0/0) with a lock-in for two years. My fear is that over the next 18 months, the 8.9 interest rate will look like a deal compared to what the interest rate will be in 2008. The economy seemed so much more vibrant with consumer spending and factory production up (Job growth!). The Real Estate Market was thriving and that helped just about everyone. The Fed may be relying on outdated analysis info. By increasing the rate again, they may be driving us out of inflation and straight into a depression.

Posted by Jean Cross | Report as abusive

It seems that these rate hikes have less to do with the economy and more with the government’s spending spree. If the U.S. didn’t need to borrow so much, they wouldn’t need to keep raising rates like they are. It’s time to cut all those “Great Society” programs that make people dependent and lazy, and it’s time to cut down those war time expenses too.

Posted by Zack | Report as abusive

My arm has risen with the monthly payment has increased $100.00 a month since a year ago…If this keeps up I may have to sell my house..I am a disabled vet and have no other means to make up the difference plus the higher cost of everything once the cost of energry is factored in..we all know what the cost of electricity, natural gas, and gasoline has done….the inflation is due to the energy, not my spending…I just get by, how long will this keep up? The people spending the money have it to spend no matter what the feds do with the interest rate….The fed is using old ways of determining how to deal with inflation…how can they control the cost of energery that isn’t going to go down, and everything will increase because of energy……….

Posted by Robert in Texas | Report as abusive

So far, interest rates haven’t hurt me because I’m a renter. But, I also have a credit card balance of about $9K, if the credit card company increases the interest I pay, currently only 7.9%, then I’m going to be hurting quickly.

I haven’t gotten more than a 2% raise at my job in the past 5 years. I can’t keep up with inflation and energy costs. My income has remained essentially flat, while my cost of living continually increases!

Posted by Kipp | Report as abusive