An expected increase in interest rates and higher mortgage payments might put the brakes on household spending on consumer goods.
Rather, the increase in spreads appears to reflect both tightness in the Commonwealth Government bond market (where supply remains limited and demand by foreign investors appears to have increased) and upward pressure on swap rates (one benchmark against which corporate bonds are priced) as companies have sought to lock in fixed - rate borrowings due to
expected increases in interest rates.
The decline in the Dow Jones index was especially pronounced on February 5 - 6, 2018, and is attributed to
an expected increase in the interest rate.
Not exact matches
With an
increase in interest rates looming
in the United States and an
expected economic slowdown, an
increasing number of investment banks are
expecting the city's home prices to come under downward pressure.
Federal Reserve officials followed through on an
expected interest -
rate increase and raised their forecast for economic growth
in 2018, even as they stuck with a projection for three hikes
in the coming year.
The Federal Reserve is also due to meet this week, and while no
rate hike
in benchmark U.S.
interest rates is
expected, investors will look for clues on the future pace of
increases.
The rise
in the annual inflation measures reported by the Commerce Department on Monday was anticipated by economists and Fed officials and is not
expected to alter the U.S. central bank's gradual pace of
interest rate increases.
«Beyond the near - term, a return to a more cautious communication strategy and pace of
interest rate increases is
expected in light of the headwinds facing Canada,» including slow inflation growth, Toronto - Dominion Bank Senior Economist Brian DePratto said
in a research note.
Treasury yields rise on Tuesday as traders position themselves ahead of the conclusion of a two - day Federal Reserve meeting commencing Tuesday, that is
expected to reveal an upbeat outlook for the economy and culminate
in the sixth
interest -
rate increase since December 2015.
This renewed crisis
in the Eurozone comes at a time when the European economies appear to be slowing down after a strong first quarter, and despite this, policy
interest rate increases by the ECB are
expected in the coming months.
The public debt charges ratio is
expected to
increase, attributable to the impact of higher
interest rates and an
increase in the stock of debt.
The downside is that the
interest rate on a HELOC is variable and often tracks any movement
in the federal funds
rate, which is
expected to
increase up to three more times after this week's quarter - point hike.
The initial
interest rate on a floating -
rate security may be lower than that of a fixed -
rate security of the same maturity because investors
expect to receive additional income due to future
increases in the floating security's underlying reference
rate.
The second phase occurred from around mid year, when it became widely
expected by the market that the US economy was going to have a soft landing, and that no further
increases in US
interest rates were likely.
The Institute
expects funding ratios to improve as
interest rates increase, leading more and more plan sponsors to consider buy - outs
in the next few years.»
Some
increase in prices was to be
expected given the current level of
interest rates.
The rise
in the annual inflation gauges reported by the Commerce Department was anticipated by economists and Fed officials and is not
expected to alter the US central bank's gradual pace of
interest rate increases.
Precious and Industrial Metals Inflation concerns, geopolitical tensions and
interest -
rate levels, especially real yields, contributed to a 1.7 % rise
in the spot price of gold (to US$ 1,325 per troy ounce), as did swings
in the US dollar.1 Gold prices traded within the US$ 1,305 — 1,360 range throughout the period, reached 18 - month highs
in March and capped their third straight quarterly gain, a feat not seen since 2011.1 Haven demand was a key support as exchange - traded gold holdings of 2,269 metric tons (mt) neared a five - year high.1 The Fed is widely
expected to boost borrowing costs, and investors have been carefully watching the central bank's statements to see whether it targets more
rate increases in 2018 than previously projected.
The Fed left
interest rates unchanged, but officials said they
expect one more
increase in short - term
rates this year.
While CBO projects higher projections for wages and taxable corporate profits will boost revenues by about $ 195 billion over the next decade, it also
expects changes
in interest rates and inflation will
increase spending by $ 302 billion over the same period.
The investment manager generally will
increase the exposure of the Fund to
interest rate risk
in environments where the return
expected to be derived from that risk is high, and generally will reduce exposure to
interest rate risk when the return
expected to be derived from that risk is unfavorable.
While the Federal Reserve decided
in December to
increase short - term
interest rates, that hasn't yet translated into significant
increases in deposit
rates paid out by banks on safe, federally insured deposits — the kind of accounts consumers might want to use for an emergency fund or for parking cash they
expect to use
in the next month or two.
It's hard to say, but certainly
in a scenario where our government attempts to make up for the sins of over borrowing by creating inflation, we should
expect interest rates to
increase enough to hurt.
I continue to
expect that we will gradually
increase our exposure to inflation - protected securities and commodities on substantial weakness
in these areas, but as inflation pressures are most likely still several years away, our primary concern here is with fresh credit weakness, and that concern still translates into a moderate exposure to
interest rate fluctuations.
The Fed recently raised its key
interest rate by 0.25 % and signaled that more
increases should be
expected in 2017.
While such a
rate of expansion will clearly not be sustainable
in the longer run, there is little sign at this stage that the appetite for borrowing has been restrained by the recent
increases in interest rates, even though the higher debt burden of households might be
expected to make them more responsive to
interest rate changes.
This means they
expect to see a gradual
increase in mortgage
interest rates over the coming months.
But
in the current situation, where nominal
interest rates are constrained because they can't go below zero, a small
increase in expected inflation could be helpful.
Floating -
rate securities The initial
interest rate on a floating -
rate security may be lower than that of a fixed -
rate security of the same maturity because investors
expect to receive additional income due to future
increases in the floating security's underlying reference
rate.
We think it's realistic to
expect further gains
in global stocks and modest
interest rate increases, along with more volatility.
As the European Central Bank's discussions on how to wind down its quantitative easing program continued — ahead of a formal announcement
expected at the end of October — policymakers were careful to emphasize their view that it remained too early to contemplate any
increase in interest rates.
Officials also
expect interest rates to tread higher with at least two
increases in 2019 and 2020 correspondingly, bringing the federal funds
rate to 3.375 percent effectively, higher than the 3 - percent equilibrium
rate, as indicated by the dots.
There will likely be some softening
in the market as
interest rates continue to
increase, as
expected, and valuations continue to mature.
Central bankers need to be careful not to
increase interest rates too quickly this year because that could slow the economy too much, St. Louis Federal Reserve President James Bullard told CNBC on Thursday.Wall Street
expects the Fed to raise
rates at next month's meeting,
in the first of what's seen as at least three...
Could be ideal if you're
expecting an
increase in income, plan to live
in the home for only a few years, or
expect interest rates to remain at current levels.
This is no time for the Fed to be creating uncertainty by raising the specter of
interest rate increases at a time when markets do not
expect 2 percent inflation
in this decade.
Profits after
interest have tended to decline over the past couple of years, reflecting the impact of the 1994
interest rate increases and a tendency for corporate leverage to
increase, but they remain at high levels compared with historical averages; they can be
expected to receive a further modest boost as
interest -
rate reductions
in the second half of last year begin to feed through into profit results.
The correlation between the Fed's five - year forward breakeven
rates and 10 - year Treasury yields recently has been fairly strong, and with breakeven
rates increasing, we would
expect to see a corresponding rise
in interest rates.
When a Fed
rate hike occurs, you can
expect variable
interest rates to rise
in the future, but it won't happen overnight and it will likely mimic the
increase of the Fed
rate hike.
The U.S. central bank is
expected to
increase interest rates for a third time this year
in December.
Such statements reflect the current views of Barnes & Noble with respect to future events, the outcome of which is subject to certain risks, including, among others, the general economic environment and consumer spending patterns, decreased consumer demand for Barnes & Noble's products, low growth or declining sales and net income due to various factors, possible disruptions
in Barnes & Noble's computer systems, telephone systems or supply chain, possible risks associated with data privacy, information security and intellectual property, possible work stoppages or
increases in labor costs, possible
increases in shipping
rates or interruptions
in shipping service, effects of competition, possible risks that inventory
in channels of distribution may be larger than able to be sold, possible risks associated with changes
in the strategic direction of the device business, including possible reduction
in sales of content, accessories and other merchandise and other adverse financial impacts, possible risk that component parts will be rendered obsolete or otherwise not be able to be effectively utilized
in devices to be sold, possible risk that financial and operational forecasts and projections are not achieved, possible risk that returns from consumers or channels of distribution may be greater than estimated, the risk that digital sales growth is less than expectations and the risk that it does not exceed the
rate of investment spend, higher - than - anticipated store closing or relocation costs, higher
interest rates, the performance of Barnes & Noble's online, digital and other initiatives, the success of Barnes & Noble's strategic investments, unanticipated
increases in merchandise, component or occupancy costs, unanticipated adverse litigation results or effects, product and component shortages, the potential adverse impact on the Company's businesses resulting from the Company's prior reviews of strategic alternatives and the potential separation of the Company's businesses, the risk that the transactions with Microsoft and Pearson do not achieve the
expected benefits for the parties or impose costs on the Company
in excess of what the Company anticipates, including the risk that NOOK Media's applications are not commercially successful or that the
expected distribution of those applications is not achieved, risks associated with the international expansion contemplated by the relationship with Microsoft, including that it is not successful or is delayed, the risk that NOOK Media is not able to perform its obligations under the Microsoft and Pearson commercial agreements and the consequences thereof, risks associated with the restatement contained
in, the delayed filing of, and the material weakness
in internal controls described
in Barnes & Noble's Annual Report on Form 10 - K for the fiscal year ended April 27, 2013, risks associated with the SEC investigation disclosed
in the quarterly report on Form 10 - Q for the fiscal quarter ended October 26, 2013, risks associated with the ongoing efforts to rationalize the NOOK business and the
expected costs and benefits of such efforts and associated risks and other factors which may be outside of Barnes & Noble's control, including those factors discussed
in detail
in Item 1A, «Risk Factors,»
in Barnes & Noble's Annual Report on Form 10 - K for the fiscal year ended April 27, 2013, and
in Barnes & Noble's other filings made hereafter from time to time with the SEC.
Such statements reflect the current views of Barnes & Noble with respect to future events, the outcome of which is subject to certain risks, including, among others, the effect of the proposed separation of NOOK Media, the general economic environment and consumer spending patterns, decreased consumer demand for Barnes & Noble's products, low growth or declining sales and net income due to various factors, possible disruptions
in Barnes & Noble's computer systems, telephone systems or supply chain, possible risks associated with data privacy, information security and intellectual property, possible work stoppages or
increases in labor costs, possible
increases in shipping
rates or interruptions
in shipping service, effects of competition, possible risks that inventory
in channels of distribution may be larger than able to be sold, possible risks associated with changes
in the strategic direction of the device business, including possible reduction
in sales of content, accessories and other merchandise and other adverse financial impacts, possible risk that component parts will be rendered obsolete or otherwise not be able to be effectively utilized
in devices to be sold, possible risk that financial and operational forecasts and projections are not achieved, possible risk that returns from consumers or channels of distribution may be greater than estimated, the risk that digital sales growth is less than expectations and the risk that it does not exceed the
rate of investment spend, higher - than - anticipated store closing or relocation costs, higher
interest rates, the performance of Barnes & Noble's online, digital and other initiatives, the success of Barnes & Noble's strategic investments, unanticipated
increases in merchandise, component or occupancy costs, unanticipated adverse litigation results or effects, product and component shortages, risks associated with the commercial agreement with Samsung, the potential adverse impact on the Company's businesses resulting from the Company's prior reviews of strategic alternatives and the potential separation of the Company's businesses (including with respect to the timing of the completion thereof), the risk that the transactions with Pearson and Samsung do not achieve the
expected benefits for the parties or impose costs on the Company
in excess of what the Company anticipates, including the risk that NOOK Media's applications are not commercially successful or that the
expected distribution of those applications is not achieved, risks associated with the international expansion previously undertaken, including any risks associated with a reduction of international operations following termination of the Microsoft commercial agreement, the risk that NOOK Media is not able to perform its obligations under the Pearson and Samsung commercial agreements and the consequences thereof, the risks associated with the termination of Microsoft commercial agreement, including potential customer losses, risks associated with the restatement contained
in, the delayed filing of, and the material weakness
in internal controls described
in Barnes & Noble's Annual Report on Form 10 - K for the fiscal year ended April 27, 2013, risks associated with the SEC investigation disclosed
in the quarterly report on Form 10 - Q for the fiscal quarter ended October 26, 2013, risks associated with the ongoing efforts to rationalize the NOOK business and the
expected costs and benefits of such efforts and associated risks and other factors which may be outside of Barnes & Noble's control, including those factors discussed
in detail
in Item 1A, «Risk Factors,»
in Barnes & Noble's Annual Report on Form 10 - K for the fiscal year ended May 3, 2014, and
in Barnes & Noble's other filings made hereafter from time to time with the SEC.
So if an investor
expects market
interest rates to go down, they want a long - duration bond portfolio because it will maximize the
increase in price.
In addition, should the Fed decide not to increase interest rates in March, that would be a positive shock (since most are expecting an increase at this point
In addition, should the Fed decide not to
increase interest rates in March, that would be a positive shock (since most are expecting an increase at this point
in March, that would be a positive shock (since most are
expecting an
increase at this point).
In December 2015, the Fed began raising interest rates for the first time in nearly a decade and is expected to continue gradually increasing and normalizing rates throughout 201
In December 2015, the Fed began raising
interest rates for the first time
in nearly a decade and is expected to continue gradually increasing and normalizing rates throughout 201
in nearly a decade and is
expected to continue gradually
increasing and normalizing
rates throughout 2018.
An
interesting item
in the HUD study was that borrowers who opted for no - cost loans realized more benefit than would be
expected — they did pay a higher
interest rate to compensate for having no loan costs, but the
increased rate did not offset the cost savings most of the time.
Keep the following
in mind as we make our way through a period of
expected interest -
rate increases:
For example, if the FOMC has
increased the fund
rate by 25 basic points at each of its last three meetings and there is one more FOMC meeting before the last 91 - day T - Bill auction
in May, one can
expect education loan
interest rates to be about 25 basis points higher than the projections listed above.
For a single graduate with $ 20,000
in a Federal Direct Consolidated Student Loan with an
interest rate of 6.8 % and an income of $ 40,000 you could
expect your monthly payments to start around $ 113 per month initially, but slowly
increasing to $ 233 a month towards the end of your loan, for a total cost of $ 40,020 over the life of the loan.
Even a cursory glance at financial markets indicates that market participants are
expecting some form of
interest rate increase in the near future — there has been a sell - off
in the 10 - Year U.S. Treasury Bond market, and certain sectors that are
expected to benefit from such a
rate increase have gained.