Dumb with Money

The Fed raised rates another quarter point for the 17th time in a row.  I expect another full raise of a half point before they start slowing down.  Gas prices are starting to kill inflation.  So what do we do?

If you are trying to save short term money:

Stick with the online savings accounts for another two months.  Then by September keep your eye out for a good CD rate.  Lock in a long CD, you should see rates in CDs dip at that point. 

If you are trying to save long term money:

The market is a very safe play right now.  The index funds are doing well.

If you are borrowing money:

The rates are going to climb until Fall.  If you are buying a house soon, lock in ASAP. 

If you can wait until next year, I sure would.

I’ve been reading all over the place that the Fed may raise the rate by a full 1/2 point instead of the expected 1/4 point.  Many of the big names say they will do it to kick down inflation for a good amount of time.  To those that are looking to lock in a mortgage rate, this sounds horrible.  To those looking to get a better CD rate, yeah! That would be the usually way we feel, right?

This is one of those times where inflation is throttling so much, it might actually help everybody who is affected by interest rates.

Borrowing Money?-  If it goes up a full 1/2 point,  this will help you in about 60 days when the fed comes out again and says that there will be no rate hike because we already went up a full half point.  I would then expect rates to be slightly below today’s rates.

Lending The Banks Your Money?-  If it goes up a full 1/2 point, wait 40 days and lock in a long period CD for the best rate possible.  I’m pretty sure you will see this rate roller coaster picking up speed really soon.  The rates just won’t ever get any better than this.