"We'll be ruined!" wailed a Citibank spokesman as the bank announced record profits. "This is going to break us," a Bank of America spokeswoman said. Their words sound like the cries that might be heard in the hallways of homes that would be lost to foreclosure if interest rates kept going up.
The Federal Reserve did something unusually kind when it raised interest rates again: it said that banks couldn't raise mortgage rates for people who already had loans with them.
While the banks complained, the new head of the Fed said, "I think it's time to be honest about how the Fed runs the economy and what happens as a result. When the economy slows down, we lower the rate to get it going again. This means that people will go out and buy homes because they can now afford to do so. Then when the economy picks up, we raise the rates, which has always meant the mortgage rates go right up with it. So many of these people can't pay for their homes anymore. Well, it's time to stop the violence and help these poor people. Rates can go up as a result, but only for new mortgages.
"We'll be ruined!" wailed a Citibank spokesman as the bank announced record profits.
A Bank of America spokeswoman said, "This is going to break us."
Their comments soundly reminiscent of the cries that have until now echoed through the hallways of homes that would otherwise, in the wake of rising rates, be foredoomed to foreclosure.
