1. Consumers Should Limit Borrowing
Consumers should reduce discretionary spending during periods of higher rates and postpone any unnecessary borrowing as interest rates rise.
4. Avoid Variable HELOC Loans
Your HELOC is a revolving line of credit secured by the equity in your home, often used to pay for home improvement projects.
5. Car Loans May Not Go Much Higher
The higher interest rates may not affect car loans as much as the continued chip supply constraints in the short term.
7. Savers Will Earn More Income
In the last decade, it’s never been a good idea to stay put in one place (high yield savings versus Certificate of Deposit, for instance) for the long run.
8. US Personal Savings Rate May Go Higher
Households were big savers during the pandemic, but the latest rate was 7.9% for December 2021, and more in line with 2019.
10. Where To Invest With Higher Rates
Longer-term, rising interest rates will make bonds more attractive as money from maturing bonds goes into higher-yielding bonds.