The Federal Reserve lends money to the nation’s financial institutions, currently at very low rates. Once the Fed raises its interest rates, the nation’s mortgage lenders will have to do so as well.
Global investment bank Nomura sent out a bullish rates prediction from its chief economist for the United States, Lewis Alexander.
Alexander is not only expecting higher rates to come from the Fed in December, but also an additional four more rate hikes going into 2019.
“The FOMC appears set to raise rates again at its upcoming December meeting. With continued stronger-than-expected and above-trend economic growth, some recent recovery in inflation, and financial conditions that have remained very accommodative, we now expect more interest rate hikes next year and in 2019,” he said in an email from Nomura to clients.
“In particular, we now expect the Federal Reserve to raise short-term interest rates three times next year and once in 2019,” he added.
Alexander's words carry great weight in the financial community and his prediction are sought out by big media.
Case in point, here’s Alexander on Bloomberg back in March declaring he is skeptical of 3% GDP growth in the nation.
