Fed raises rates by half a percentage point — the biggest hike in two decades. What Does This Mean for the Homeowner?

Along with the move higher in rates, the central bank indicated it will begin reducing asset holdings on its $9 trillion balance sheet. https://cnb.cx/3OXDEwL

What will this new interest rate mean for the economy and homeowners? Will we see more foreclosures, will big companies like BlackRock feed off the single family homes and buy them at rock bottom prices…. very much like the carpetbaggers??

What does carpetbagger mean in history? In the history of the United States, carpetbagger is a largely historical term used by Southerners to describe opportunistic Northerners who came to the Southern states after the American Civil War, between 1865 and 1877, who were perceived to be exploiting the local populace for their own financial, political, and/or social gain.

The modern carpetbaggers are the big corporations and governments.

When the Fed was last this aggressive with rate hikes, it took the funds rate to 6.5% in early 2000, but was forced to retreat just seven months later. With the combination of a recession already underway plus the Sept. 11, 2001 terrorist attacks, the Fed rapidly cut, eventually slashing the funds rate all the way down to 1% by mid-2003, shortly after the Iraq invasion.

Some economists worry the Fed could face the same predicament this time — failing to act on inflation when it was surging, then tightening in the face of slowing growth. GDP fell 1.4% in the first quarter, though it was held back by factors such as rising Covid cases and a slowing inventory build that are expected to ease through the year.


About Maria Rekrut

Maria Rekrut, believes Vacation Rental Investing is much more fun than the average real estate investing. Maria, known as the Vacation Rental Guru, writes blogs regularly about her stories and adventures in vacation home investing. Maria Rekrut believes that if she can become successful investing in Vacation Rentals so can anyone else by following her simple investing techniques. Maria is also a regular contributor to the Real Estate Blog http://www.reiclub.com/realestateblog/author/maria-rekrut/
This entry was posted in Real Estate Investing and tagged , , , , . Bookmark the permalink.