Continuing on with our rate series, let’s explore the relationship between risk and rates. Risk is one of the largest factors affecting the rates you pay. In fact, nearly all lending rates begin at whatever the Federal Funds Rate is, and are then adjusted upwards based on risk and lender overhead. But risk is the big one, and… Read More »
As I mentioned in my last blog, I will be doing a series detailing how lenders arrive at an interest rate. But before I get into the posts outlining different pieces of the rate puzzle, I do want to point out that there is a big misconception regarding rates. The misconception is the lowest rate is everything. And… Read More »
In a recent blog about the recent rate cut, I wrote the following: Will borrowing costs come down? Not as fast as everyone would like. While lenders’ rates typically follow the Federal Funds Rate directionally, the relationship isn’t as straightforward as many might expect. Lenders adjust more slowly, cautiously, and incrementally than the Fed. A 50 basis point… Read More »
Let’s answer a question or three, shall we? Hey Fletch, I know you always tout getting equipment when you need it but aren’t rates coming down soon? Wouldn’t it be better to wait? Dave P. Hi Dave, Honestly, assuming the equipment will earn you revenue, no, it is not better to wait. There are three reasons for this.… Read More »
When the federal reserve began raising interest rates in 2022 – a conventional response amid broader economic pressures from government overspending and surging energy costs, I predicted that there would be many rate increases, and in revisiting the topic every few months afterwards, I predicted higher rates would last a long time. Not to pat myself on the… Read More »