Question

Go to the internet and find a news article published within the last two months that discusses which direction interest rates are heading, summarize key points in detail.

In your response please include the current and projected levels of interest rates.

Answer 1

The current news article that I have used for my reference is an article by Greg Robb on marketwatch.com published on July 11, 2016. The article is titled "Here’s where interest rates are headed based on seven Fed policy rules".

The key points of the article are:

• Current fed rates are in the range of 0.50% to 0.75%.
• The pace of rates hike will be gradual going forward.
• The median federal funds rate will rise to 2.1% by the second quarter of 2018.
• The maximum that the rate may rise is up to 2.9% by the second quarter of 2018.

The article says that the long term interest rates will be influenced by the financial state of the world economy and the future outlook. If the state of economy strengthens then rate hikes will be sooner and more pronounced than expected. On the other hand if the state of the economy falters then the rate hikes will be postponed for a later stage.