Business

Why Fed Won’t Have a Big Impact on Your Loans Anytime Soon

Published

11 years ago

March 19, 2015

MATTHEW CRAFT, AP Business Writers
PAUL WISEMAN, AP Business Writers

NEW YORK (AP) — Nobody knows when exactly, but the day will eventually come when the Federal Reserve nudges its benchmark lending rate from next to zero to something slightly higher.

When that happens, it will put upward pressure on borrowing rates throughout the economy — for credit cards, mortgages and student loans. But that doesn’t mean the era of incredibly low interest rates will soon be over.

The Fed’s chair, Janet Yellen, has taken pains to be cautious. On Wednesday, the central bank gave more signals that it will move slowly toward its first interest-rate increase in nearly a decade. By the end of the year, Fed officials expect the benchmark rate will reach 0.625 percent.

It was a different world the last time the Fed began a series of hikes. Rates were already much higher than today. In June 2004, the Fed lifted its benchmark rate from 1 percent to 1.25 percent. By the time the Fed was finished in 2006, the rate had reached 5.25 percent.

Nobody expects anything like that now. With the economy still growing slowly and inflation minuscule, rates will likely hover near historic lows. The Fed doesn’t want to ratchet up the monthly payments on your credit card. It’s in no rush.

“You’re going to see rates remain low for quite some time,” says Patrick Maldari, senior fixed-income specialist at Aberdeen Asset Management.

HOUSING

Many expect mortgage rates to creep higher this year. The average 30-year mortgage carries a rate of 3.7 percent, according to Freddie Mac. That’s close to a record low of 3.31 percent and compares with an average rate of 5.9 percent a decade ago.

Greg McBride, chief financial analyst at Bankrate.com, thinks homeowners ought to lock in mortgage rates as long as they remain below 4 percent. If you haven’t refinanced already, in other words, consider it soon.

Home loans won’t hinge on the Fed’s next move, though. Mortgage rates are closely tied to long-term interest rates, specifically the 10-year Treasury note. These rates are tethered to the Fed’s benchmark yet have plenty of wiggle room.

The 10-year yield has actually been falling over the past year. The reason? The Treasury market is dominated by global players. So when Europe’s economy runs into trouble, for example, traders around the world look for safety in the Treasury market, buying U.S. government bonds and pushing yields down. Another factor: The Fed is keeping a lid on yields by sitting on trillions of dollars of Treasurys following a huge bond-buying program that ended last year.

SAVINGS

It’s been a tough time for people socking away money in savings. On average, savings accounts pay an annual percentage yield of 0.09 percent, according to Bankrate.com. A one-year certificate of deposit pays a paltry 0.28 percent. For every $1,000 saved, in other words, the bank will give you $2.80. Ka-ching!

“Savings rates are nearly at zero and, unfortunately, I think depositors aren’t going to see much of a difference,” says Casey Bond, managing editor at GoBankingRates.

The Fed has signaled that it will raise rates slowly and carefully. A series of hikes large enough to lift yields on savings accounts, however, could put the economic recovery at risk by curbing lending and business spending. “Anything that would give savers a real boost would be too disruptive,” Bond says.

“I think people need to be focused on other things, like avoiding bank fees,” Bond says. “Fees can wipe out your earnings because savings rates are so low.”

CREDIT CARDS

Credit card rates could start to inch up once the Fed raises its benchmark federal funds rate — especially the low teaser rates credit card issuers use to entice people to sign up or shift credit card balances.

McBride advises that borrowers “grab those zero-interest balance transfers and introductory credit card rates. As the Fed moves away from zero interest rates later this year, credit card issuers will too. Chip away at your variable-rate debt now before interest rates start to climb.”

Credit card rates remain high — variable credit card rates average nearly 15.8 percent, according to Bankrate.com. But they could head higher if the fed funds rate goes up. That’s because credit card rates are based on the prime rate that banks charge their best customers, and the prime rate is based on the Fed funds rate.

INVESTMENTS

To judge by the stock market’s daily swings, investors fear the Fed’s first rate increase. Speculation that the Fed is preparing to move usually knocks stocks down. But the market has actually performed well in the face of rising interest rates. A recent report from UBS looked at the Fed’s initial rate hikes going back to 1954. It showed that the Standard & Poor’s 500 index rallied an average of 7.6 percent in the next six months.

Many investors are confident that as long as the Fed moves gradually, the stock market should be fine. That’s what happened in the last round of Fed hikes, in 2004. The S&P 500 finished the year with a 9 percent gain.

___

Wiseman reported from Washington.

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Oakland Post: Week of September 2 – 8, 2026

The printed Weekly Edition of the Oakland Post: Week of September 2 – 8, 2026

Published

4 days ago

September 7, 2026

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Longtime BWOPA Member Brendalyn Goodall Appointed to California Workforce Development Board

Gov. Gavin Newsom has appointed longtime Black Women Organized for Political Action (BWOPA) member Brendalynn Goodall to the California Workforce Development Board. Goodall, an Oakland resident with decades of experience in public service, has held leadership positions focused on

Published

2 weeks ago

August 30, 2026

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Post Co-Publisher Gay Plair Cobb with Brendalynn Goodall. Courtesy photo.

By California Black Media

Gov. Gavin Newsom has appointed longtime Black Women Organized for Political Action (BWOPA) member Brendalynn Goodall to the California Workforce Development Board.

Goodall, an Oakland resident with decades of experience in public service, has held leadership positions focused on employment, aging services and assistance for underserved communities.

“Brendalynn will be a great addition to this Board,” said Gay Plair Cobb, who served as former state Assemblyman Sandre Swanson’s alternate to the California Workforce Development Board (CWDB).

“She understands that California’s non-profit organizations serve persons who have the most significant barriers to their labor market success and that the Board should help these groups navigate the complicated requirements of state funding.

“In other words, she will be a strong advocate for our most marginalized populations. Her voice is needed now, more than ever.”

CWDB works with the governor to shape workforce policies, programs and investments designed to strengthen the state’s economy. It collaborates with employers, workers, labor organizations, educational institutions, community groups and California’s 45 local workforce development boards to expand access to quality jobs and respond to regional employment needs.

According to the board, its work includes coordinating state programs and guiding investments in workforce training and development.

BWOPA California celebrated the appointment, describing Goodall as a dedicated advocate for workers, families and older adults.

“Her appointment reflects a lifetime of leadership, service, and unwavering commitment to strengthening California’s workforce and expanding opportunity for all,” the organization stated in a press release.

Goodall served as summer jobs program coordinator in the Oakland Mayor’s Office from 2012 to 2014. In that position, she helped connect young people with employment opportunities and job experience.

Before joining the Mayor’s Office, Goodall was division manager for Aging and Adult Services in the City of Oakland Human Services Department from 2002 to 2011. She previously served as senior services supervisor and program director for the city’s Department of Aging, Health and Human Services from 1990 to 2002.

Goodall is also a member of the California Commission on Aging, which advises the governor and state officials on policies and programs affecting older Californians.

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Jackie Wright Champions Bay Area Stories, Filmmakers and Cultural Institutions

As an award-winning communications professional, Wright has worked with corporations, nonprofits, government agencies, educational institutions, artists, and community organizations. In 2026, she expanded that work by launching an introductory public relations class for small businesses and nonprofits, offering practical tools for gaining visibility, shaping messages and building productive relationships with the media.

Published

2 weeks ago

August 30, 2026

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Jackie Wright of Wright Enterprises. Photo courtesy of Wright Enterprises.

By Carla Thomas

Jackie Wright has spent more than two decades helping people, organizations and communities understand the power of a well-told story.

As founder and president of Wright Enterprises, a San Francisco-based strategic communications and public affairs firm, Wright has built a career spanning journalism, public relations, media relations, crisis communications, community engagement and multimedia storytelling.

Wright’s commitment to storytelling is also deeply personal. She wrote and co-directed the 15-minute documentary, “Love Separated in Life…Love Reunited in Honor,” which chronicles the story of her parents, Specialist Five (S5 Wyley Wright Jr. and Ouida Fay McClendon Wright. Her father, a U.S. Army helicopter crew chief, died in Vietnam in 1964 while serving as an honor guard during a visit by then-Secretary of Defense Robert McNamara. Decades later, Wright and her siblings had their father exhumed from a segregated cemetery in Jacksonville, Florida, and their mother moved from her burial place in Georgia so the couple could be reunited at Arlington National Cemetery in 2014.

The family journey later took Wright and her sister to Vietnam, where they discovered the former military compound that had been named in honor of their father and another fallen soldier. The documentary, centered on love, war, family, racial understanding, and remembrance, earned festival recognition at screenings.

“It was quite an honor to learn about my family’s history and share it on film,” said Wright.

That filmmaking experience complements Wright’s longstanding advocacy for independent cinema. She has served as a media partner and brand ambassador for Bay Area film festivals, including the San Francisco Black Film Festival, Oakland International Film Festival, and the Durban International Film Festival in South Africa.

“It’s important to help filmmakers and underrepresented stories reach broader audiences,” said Wright.

Whether promoting a neighborhood organization, championing an independent filmmaker or preserving her own family history, Wright has remained consistent. Through Wright Enterprises, she has turned communications into both a profession and a form of community service, telling stories that might otherwise go unheard.

“Our stories are an integral part of our history, and our history is not only American history, but worldwide,” she said.