We’ve been living in a kind of fantasy land because we’ve grown accustomed to low-interest rates. We all know the story: As the economy tanked and stocks plummeted, the Federal Reserve pulled out all the stops, including a massive asset-buying binge and cutting benchmark interest rates down to zero.
While the move was designed to be temporary, this zero interest-rate policy (ZIRP) managed to stick around for a multitude of years. In this environment, we’ve forgotten how to act when things return to a more normalized rate scenario. And we’re not talking just about our portfolios. There are a lot of other personal finance items that are affected by higher rates. With the Fed finally starting to raise them, now is not the time to ignore them.
Take a look at our guide to higher rates.
Yellen, We Have Lift-Off
With the economy starting to move in a positive direction and inflation heating up, investors have been forced to deal with an old foe: rising rates. After nearly a decade of zero rate increases, Janet Yellen and the Federal Reserve have raised rates three times since December of 2015.