Sentences with phrase «economy leads to a higher interest rates»

Also, in general, a stronger economy leads to a higher interest rates, with or without Fed involvement.

Not exact matches

That said, if the economy really starts growing gangbusters again, the Fed could start raising interest rates, causing a commensurate jump in US treasury yields, which will lead to higher savings interest, CD interest, and dividend yield payout ratios.

The selling has raged on in the days since, fueled partly by fear that higher inflation would lead the Fed to accelerate its interest rates hikes and weaken the economy and the stock market.

The House overwhelmingly approved legislation (PDF) that ties student loan interest rates to the market, which would translate to lower rates for students now but would lead to higher rates if the economy improves.

If the economy continues to improve in 2017 and President Trump's housing policies lead to strong economic and housing growth, there will be higher interest rates.

For example, the double - digit inflation of the 1970's was caused by banks keeping interest rates low in an attempt to stimulate a weak economy, at a time when imported inflation from the oil shock was high (leading to stagflation).

This might lead to higher risk premia and higher nominal interest rates that would undermine the effectiveness of such a policy to stimulate the economy,» Dudley said.

That, in turn, could lead to an explosion in U.S. government debt and pave the way for higher, economy - dampening interest rates charged to businesses and consumers.

Paul Volcker, the newly appointed Fed chairman, led a sharp shift in Fed policy in October, 1979 which drove interest rates sky high, sent the economy into two back - to - back recessions and knocked inflation out.

As discussed last month, this is a bit of a too much of a good thing crash all around — tax cuts into a strong economy sending inflation and interest rates high enough to lead the Federal Reserve to (potentially) over react and raise rates too high, causing a recession and growing debt issues as the government refinances debt at higher rates, all while a tax cut reduces federal revenues.

Good economic news has pushed borrowers into the market seeking new loans, as they reason that a healthy economy will lead to higher interest rates.

The improving economy, however, will likely lead to higher inflation and interest rates, which will raise the cost of borrowing for consumers and investors.