Economic Impacts Of Inflation And Rising Interest Rates: 3 Specific Areas
Most of us, have experienced, a variety of economies, from inflationary, to exit – to, approaching something, which resembles a recession. Interestingly, Since, we can’t predict the future (at least, not accurately), doesn’proceed it make sense, to be, as – informed, as possible, in order to t, as logically, as possible? How these economic conditions, might, impact, vital components, such as real estate/ housing, the stock industry, and the performance of bonds, and bank – interest rates, is oftensignificant, , and it is, usually, wise, to proceed, as an informed individual! In fact, With, that in and, this article will attempt to, briefly, consider, examine, commentary, mind discuss, 3 specific areas, in terms of how, overall conditions, may influence them.
1. Real estate/ Housing: It is wise to recognize, how a variety of, economic conditions, affect many components, of our economy! As you may know, If, when, rates rise, how might that/ impact home buying, etc? At present, we are experiencing, the cost of fresh housing, rising, quickly, largely because, the costs, related to many building supplies, especially, lumber, etc, has risen, at a pace, we have not seen before, in recent memory! The combination of the impacts, from the prolonged, horrific pandemic, inexpensive – funds (, creatingextremely, affordable, mortgages), and related, life – style changes, etc, have caused, a significant, increase in the costs of buying a house. In as it turns out recent times, because, mortgage rates, have remained at, and/ or, near, record – low rates, largely because, of a continued period, of the Federal Reserve Bank, maintaining, extremely low, rates, of borrowing funds! How might inflation, influence the real estateaffordabilitymarkets, in terms of pricing, availability, , and whether, we witness, a buyers, sellers, or neutral field? New home prices, therefore, have significantly increased, in costs/ prices, and, to – date, it has slowed the rate of sales, in these properties.
2. Stock market: With, interest rates, so low, alternatives, such as bonds, and bank accounts, pay, very little! For, the last few years, we have witnessed, a rising, stock field. The probability is, when rates rise, as they will, eventually, it will have an adverse affect on stock prices/ popularity! As you may know, Nearly, every index, has improved, and benefited, from the prolonged low – interest rates, which, mean, stocks have increased, in popularity, as an investment vehicle, largely, because, they are, the only – game – in – town.
3. Bonds and banks: Indeed, While, low rates, translate – to, what is called, low-cost – funds, for those, borrowing the, when these rise, the costs to borrow, will increase, and funds rates, provided, on these types of accounts, will increase!
The more – informed, one is, the better – off, he probably becomes, especially, in changing times! Will you commit, to being, a wiser as it turns out consumer, etc?
