Capping Interest Rates is Bad For New Mexico Consumers

As New Mexico opened the second session of the 55th legislature, five Democrats introduced a bill that, despite good intentions, would make credit inaccessible for thousands of the state’s residents. While well-intentioned, House Bill 132 would be particularly harmful to the residents of a state that routinely has one of the lowest per capita incomes and highest poverty rates in […]

Looking for a Place to Park Your Nest Egg?

We used to think that when the Federal Reserve raised interest rates, we would once again have a chance to invest our consumer nest eggs in low risk bonds that pay 4%-5%.  It may be a daydream.  Four upcoming changes in the financial market could hold rates down longer than we might expect.  Lurking on […]

Negative Interest Rates and the Mattress

Interest rates have a strong influence on consumers investing, homes and cars affordability, college loan payments, and the income retirees receive from their retirement plans.  Currently, interest rates are low – conventional 30-year mortgage rates have dropped to 3.64% and a 10-year Treasury bill yields 1.6%.  Depending on whether consumers are the borrower or lender, […]

Mortgages May Become Too Onerous

For those determined and financial able, wonderful homes are available at prices considered a steal just a few years ago.   A lively housing market has traditionally helped pull our economy out of the recession ditch.  What this market lacks are able consumers with dreams of a first-time or move-up home. Although the latest recession was […]

When Quantitative Easing Ends

On Jan 30, 2013 in a CNBC interview, 2013 Martin Feldstein noted that the Fed’s quantitative easing (QE) program used to increase employment and economic growth has been holding 10-year T-Bill rates very low – then about 1.95%.   QE has also made mortgages cheaper than would otherwise be the case.  Indeed, new 30-year mortgages have […]

Interest Rate Risks

For 80% of consumers, exposure to interest rates have been in mortgages, car loans, and passbook savings, but not stocks and bonds.  For several years, consumers who are investors, and especially retirees, sat on cash to avoid the volatile equities market and low-yield fixed income market, usually CDs or municipal bonds (“munis”).  High grade bond […]