America’s first interest rate hike in seven years is here.
The Federal Reserve raised its key interest rate a quarter of one percent.
The rate increase is a small one, but will affect thousands of Las Vegans, including home buyers, investors and savers.
The move was widely expected. And is a sign of how much the economy has recovered since the Great Recession.
Terry Shirey is the president and Chief Operating Officer for Nevada State Bank. He told KNPR's State of Nevada that the Federal Reserve is concerned about inflation and had to move the rate to prevent it from taking over.
For the average person looking for a car loan or home mortgage, Shirey doesn't believe she'll see much of a difference in loan rates, because the market had already "baked in" the expected increase.
"The market has anticipated the increase that has happened," he said, "I think you've seen it pretty much across the board those longer term fixed rates that were in place earlier this week are looking the same now."
However, the area that will feel the impact will be people with variable rate loans. Shirey said those loans will see about an increase of about $2 per $10,000 loaned, which is still relatively small.
But he believes the hike "will get a lot of people off the sidelines" and get them to lock in a fixed rate loan.
Another area of the economy that will see a boost are people who have money in savings accounts.
"Over time, particularly if the Federal Reserve continues to increase the interest rates, you will start to see that manifest itself in the deposit rates paid to customers but in the short term, its very unlikely that you'll see that," Shirey said.
Terry Shirey, president and Chief Operating Officer, Nevada State Bank.
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