While the Dow Jones Industrial Average saw its biggest drop of the year on Monday after a Federal Reserve announcement on Monday that it might dial back efforts to keep interest rates low, consumer need not be concerned, according to an economist.
Federal Reserve Chair Ben Bernanke announced on Wednesday that the Fed would weigh reducing some of its efforts to keep interest rates low as the U.S. economy shows signs of gradually improving.
Chris Farrell, economics editor of "Marketplace Money," said when it comes to mortgages, “the era of low rates is over, but that doesn’t mean rates are going to climb quickly.”
He said credit card rates are likely to go up a bit, and auto loans are likely to stay stable as automakers want to keep up incentives for consumers to buy new cars.
While he said Wall Street is skittish and can overreact to news from the Fed, he said “consumers should not feel pressure to do something.”
