Interest Rates – Are They on the Way Up?

Bureau of Labor Statistics Unemployment Rate 2003 to 2013Interest rates increased about ΒΌ percent in the last two weeks, Mortgage Market in Review. Is this trend going to continue? There’s no clear answer just yet. The Bureau of Labor Statistics reported a drop in the unemployment rate in November to 7 percent, the lowest it’s been in five years.

If this causes the Federal Reserve to “taper” their economic stimulus program when they meet next week, we may see further rate increases before the year is out. Analysts are not in agreement as to whether this will happen or not.

While the bond and stock market reacted as if the Fed was going to scale back their Treasury purchases before the end of the year, many do not expect them to begin their taper until 2014.

At 7 percent the unemployment rate was lower than predicted and hiring was strong in most industries. But the picture is still not all rosy. The drop in unemployment was partially due to seasonal hiring and also to the end of the government shutdown. MarketWatch outlines some of the reasons the unemployment numbers may not be as good as they look.

So it seems the jury is still out as to what the Fed will do next week. We will have to wait and see.

 

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