The Effect of Fed Funds Rate Hikes on Consumer Borrowing Costs

Nina Boyarchenko, Sooji Kim and Matthew Plosser

No 20151221, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The target federal funds rate has hovered around zero for nearly a decade, and observers are questioning what effect an increase could have on both the financial markets and the real economy. In this post, we examine the historical reaction of loan rates to target rate increases. Specifically, we examine the interest rates that banks offer on residential mortgages and home equity lines of credit (HELOCs).

Keywords: Federal Funds; Consumer Lending; Monetary Policy; Taper Tantrum (search for similar items in EconPapers)
JEL-codes: D1 E5 (search for similar items in EconPapers)
Date: 2015-12-21
New Economics Papers: this item is included in nep-mac and nep-mon
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