{"id":28784,"date":"2017-12-12T08:03:54","date_gmt":"2017-12-12T13:03:54","guid":{"rendered":"http:\/\/olduvai.ca\/?p=28784"},"modified":"2017-12-12T08:03:54","modified_gmt":"2017-12-12T13:03:54","slug":"how-fed-rate-hikes-impact-us-debt-slaves","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=28784","title":{"rendered":"How Fed Rate Hikes Impact US Debt Slaves"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2017\/12\/11\/how-fed-rate-hikes-impact-us-debt-slaves\/\">How Fed Rate Hikes Impact US Debt Slaves<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>But savers are still getting shafted.<\/strong><\/p>\n<p>Outstanding \u201crevolving credit\u201d owed by consumers \u2013 such as bank-issued and private-label credit cards \u2013 jumped 6.1% year-over-year to $977 billion in the third quarter, according to the Fed\u2019s Board of Governors. When the holiday shopping season is over, it will exceed $1 trillion. At the same time, the Fed has set out to make this type of debt a lot more expensive.<\/p>\n<p>The Fed\u2019s four hikes\u00a0of its target range for the federal funds rate in this cycle cost consumers with credit card balances an additional $6 billion in interest in 2017, according to <a href=\"https:\/\/wallethub.com\/blog\/fed-rate-hike-survey\/39383\/\">WalletHub<\/a>.\u00a0The Fed\u2019s widely expected quarter-percentage-point hike on December 13 will cost consumers with credit card balances an additional $1.5 billion in 2018. This would bring the incremental costs of five rates hikes so far to $7.5 billion next year.<\/p>\n<p>Short-term yields have shot up since the rate-hike cycle started. For example, the three-month US Treasury yield rose from near 0% in October 2015 to 1.33% today. Credit card rates move with short-term rates.<\/p>\n<p>Mortgage rates move in near-parallel with the 10-year Treasury yield, which, at 2.39%, has declined from about 2.6% a year ago. Hence, 30-year fixed-rate mortgages are still quoted with rates below 4%, and for now, homebuyers have been spared the impact of the rate hikes.<\/p>\n<p>Auto loans, in line with mid-range Treasury yields, have wavered a lot and moved up only a little. The average APR on a 48-month new-car loan rose only 40 basis points over the past two years to 4.4% in August 2017, according to WalletHub, citing the most recent data available. Note that the offers of \u201c0% financing\u201d are usually in lieu of rebates or other incentives and are therefore rarely free.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>How Fed Rate Hikes Impact US Debt Slaves But savers are still getting shafted. Outstanding \u201crevolving credit\u201d owed by consumers \u2013 such as bank-issued and private-label credit cards \u2013 jumped 6.1% year-over-year to $977 billion in the third quarter, according to the Fed\u2019s Board of Governors. When the holiday shopping season is over, it will [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[195,303,2468,431,534,4916,3650,4254,4255],"class_list":["post-28784","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-fed","tag-interest-rate-hike","tag-interest-rates","tag-monetary-policy","tag-savers","tag-us-federal-reserve","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28784","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=28784"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28784\/revisions"}],"predecessor-version":[{"id":28785,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28784\/revisions\/28785"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=28784"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=28784"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=28784"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}