Federal Reserve Expected To Announce Increase In Interest Rates

What you pay for mortgages and car loans could also rise.

March 19, 2018 - 11:38 am

DETROIT (WWJ) - All eyes are on the Federal Reserve this week -- with the expectation that interest rates will be on the rise.

David Sowebry, portfolio manager for Ancora Advisors in Bloomfield Hills, telling WWJ Newsradio 950 that what you pay for mortgages and car loans could also rise.

"With so many home equity loans tied to home equity and to the prime rate - that will certainly go higher," says Sowebry. "Mortgage rates today are less than 4 percent - it could be 4.5 percent, small business loans now going higher."

It's expected that the Federal Reserve will announce the increase in interest rates during their Wednesday meeting -- with the possibility of raising them at least two more times this year.

"Most bond investors returns are negative  -- down anywhere from 2 to 4 percent and higher interest rates will very likely prove to be negative," says Sowebry.

Sowerby expects the federal funds rate - currently at 1.5 percent could go to 1.75 percent after Wednesday's meeting, with possibility of reaching 2.5 percent by the end of the year.