Now that everyone is playing the market, today’s high interest rates are a subject of casual conversation, like talking about the weather. And like the weather, they’ve had unpredictable effects.
In a little more than two years, the US Federal Reserve has raised the federal funds rate, the benchmark that influences the cost of borrowing just about everywhere, from near zero to more than 5.25%. That’s a big change on its own, but it also represents an almost generational shift. The last time this rate was above 5% was 2007, the same year the iPhone was introduced. No one under 35 has had to manage their finances with US rates this high in their adult life.