Interest rates rising and will likely continue to do so.
NEW YORK (CNN/Money) - The Federal Reserve raised a key short-term interest rate Tuesday and suggested more rate hikes are on the way, saying it believes the effects of Hurricane Katrina on the economy would be temporary.
The central bank's policy-makers boosted their target for the federal funds rate a quarter-percentage point to 3.75 percent, the highest level in more than four years.
For consumers, the increase in the fed funds rate, an overnight bank lending rate, means higher rates for credit cards, car loans and adjustable-rate mortgages.
On Wall Street, investors expressed disappointment, sending stocks lower after the announcement. (For more on the markets, click here).
The rate increase was the 11th straight since June 2004 as Alan Greenspan and other central bankers seek to keep inflation under control. In its heavily scrutinized statement, the Fed said that more "measured" rate increases were likely in the coming months. The Fed meets again on November 1. (For the full statement, click here).
End exerpt, for full article please see link provided--RG)
Interest rates have been at historic lows. What happens to adjustable rate mortgages when interest rates go up? That's right, payments go up. Same concept here with our governmental debt.