When you hear talking heads on financial shows mention the Federal Reserve, the drama attached to the reports may cause you to tune out. After all, you do not personally impact the decisions of the Federal Reserve and despite what is decided during prominent Federal Reserve meetings, it can be difficult to discern what long-term benefit is intended by incremental—such as one-quarter of one percent—changes in the Federal Funds rate.
Perhaps having a better understanding of the purpose of the Federal Reserve System could help you tune back in, especially because interest rate changes could, from time to time, impact your financial well-being—particularly regarding major purchases you are considering. For example, the decision to purchase a second home when interest rates are low could save you thousands of dollars on mortgage interest alone.
Mckenzie Frankel, Principal of Entrust Financial, has more thoughts on the impact of interest rate movements as she answers the question: What could declining interest rates mean for you?
Take a look and then contact us to discuss how interest rate movements might affect your financial well-being.