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 […]
interest rates
Capping Interest Rates Will Only Harm Consumers
With Senator Sharrod Brown (D-OH) now serving as chair of the Senate Banking, Housing, and Urban Affairs Committee, legislation could probably be put forward to cap interest payments on loans. While the entire proposal is yet to be released, any move to cap interest rates can be seen as part of Senator Brown’s effort to […]
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, […]
The Interest Rate Tangle Reveals a Chronic Flaw
Job and wage growth have slowed, and people keep leaving the labor force even as the country has clawed its way out of the deep hole of 2008. The unemployment rate sits at 5.1%, recovering from an abysmal 10% in September 2009. More than half of the unemployment recovery is a mirage since between 2008 […]
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 […]