Interest Rates have been dropping lately due to global economic concerns sending bond prices up. They range between 3.75-4.25% currently. The Feds have also announced no more rate changes for the year. Rates aren't directly affected by the Fed Rate hikes contrary to popular belief, they are a result of the 10-year treasury.
Interest rates are determined by three forces:
- The first is the Federal Reserve, which sets the fed funds rate. That affects short-term and variable interest rates.
- The second is investor demand for U.S. Treasury notes and bonds. That affects long-term and fixed interest rates.
- The third force is the banking industry. They offer loans and mortgages that can change interest rates depending on business needs.