Educational Spotlight: Interest Rates
Interest rates have been a hot topic, with the President consistently complaining that rates are too high, and even suggesting we should have a rate of 1%.
The first thing investors should understand about interest rates is that the Federal Reserve Board (Fed) only sets the Fed Funds Rate, which is the very short term. The rest of the rates are set by the free market, based on expectations of future rates, as well as supply and demand. The most important rate for the economy is the ten-year rate, as mortgages are loosely based on that, and this is often considered the base risk-free rate for equity valuation.Keep reading the educational spotlight at this link: