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Interest rates are rising

7/2/2018

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The Federal Reserve has hiked the benchmark interest rate twice this year, and it expects to make two more hikes before 2019 arrives. It projects the federal funds rate will approach 3.5% by 2020.1
 
What could these rate hikes mean for you?
​
Do you have a lot of credit card debt? The APR on your credit cards should continue to rise in response to the Fed’s moves.2
 
Are you a business owner seeking a short-term loan? Try to arrange financing now. The cost of short-term borrowing increases when the Fed hikes.2
 
Do you own a business that sells high-end merchandise? Your sales may be impacted. Higher interest rates force consumers to put more money toward debt. That means less disposable income to spend on the good life.
 
Do you have a fixed-rate mortgage? You are unaffected. If you have an adjustable-rate mortgage, your payments may reset higher at the start of the next adjustment period.3
 
Are you retired, or about to retire? You will be happy to know rates of return are improving on fixed-income investments. Take 1-year certificates of deposit, for example. Back in 2015, most of them were yielding 0.25%. Now their return is around 2.3%. Money market funds and even deposit accounts should soon feature slightly higher interest rates. The downside of this? If fixed-income investments grow increasingly attractive, investors may pull money out of equities.4
   
Do the Fed’s actions concern you? Call me or email me today. We can talk about interest rate hikes and other factors that may affect your financial future.

Daniel Shub, AIF®, RFC®
Wealth Advisor & Founder
OCTO Capital Wealth Management
248-731-7729


​1 - bondbuyer.com/articles/fed-raises-rates-officials-boost-outlook-to-four-hikes-in-2018 [6/13/18]
2 - smallbusiness.chron.com/interest-rates-affect-businesses-67152.html [6/7/18]
3 - tinyurl.com/y74tqh6q [6/13/18]
4 - marketwatch.com/story/rising-interest-rates-give-retirees-good-news-and-bad-news-2018-06-20 [6/20/18]

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    Daniel Shub

    ​AIF®, RFC®

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​©2022 OCTO Capital, LLC. OCTO Capital is a Michigan-based Investment Advisory Firm. We may only transact business in those states in which we are registered, or qualify for an exemption or exclusion from registration requirements.
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​​Are you looking for a fiduciary financial advisor and retirement planner in Metro Detroit, Michigan? You've come to the right place. Octo Capital is serving clients in Michigan, including Bingham Farms, Bloomfield Hills, Troy, Rochester, West Bloomfield, Birmingham, Farmington Hills, Rochester Hills, Sterling Heights, Shelby Twp, Livonia, and Northville. We also work with clients located in other states*. We provide comprehensive financial planning and investment management. Our services include retirement income planning, cash flow projections, tax-efficient placement of assets, strategic tax-loss harvesting, coordination of all income sources in retirement, detailed analysis of tax returns focused on tax-saving opportunities, and more.
  • Home
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    • Tax Planning
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