Go Banking Rates analyzes how bank interest rates (http://www.gobankingrates.com/
One factor affecting interest rates today, according to Go Banking Rates, is inflation.
Fergus Hodgson, Director of Fiscal Policy Studies for the John Locke Foundation in North Carolina, shares why inflation makes a great deal of difference on consumer interest rates.
“Inflation, the devaluation of a currency expressed in higher price levels, is one of two underlying drivers of retail interest rates — the other is the activity of the Federal Reserve system,” explains Hodgson. “In the presence of higher inflation, which the United States is beginning to experience, lenders need to raise their rates in order to generate a return. Relatively speaking, the money they receive when paid back will be less valuable, which offsets the interest rate charged.”
While some of the factors affecting interest rates today are out of consumers’ immediate control, maintaining a clean line of credit and taking the initiative to shop around for the best bank interest rates in the area opens the door to interest rates on deposit and loan products that meet customers’ needs.
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