Fed raises short-term interest rates
The Federal Reserve voted Wednesday to raise its short-term interest rates, and that likely will mean more mortgage rate increases are on the horizon. The Fed’s rates are not directly tied to mortgage rates but tend to follow 10-year Treasury bonds. However, mortgage rates are often influenced by the Fed’s rates.
The Fed increased its federal fund rate from 1.5 percent to 1.75 percent, which is the highest level since 2008. The Fed’s move Wednesday marks the first of what many economists predict will be three rate hikes this year. Some economists are predicting the federal funds rate to be at 2.1 percent by the end of the year.