Fallout from Greek debt crisis: low interest rates in US
US consumers are seeing lower interest rates on mortgages, car loans, even credit cards, as investors flee the euro because of the Greek debt crisis.
One fallout of the Greek debt crisis is lower interest costs in the United States.
Mortgage rates? So many investors are piling out of the euro and into US Treasuries that interest rates are falling. The average rate for a 30-year fixed-rate mortgage has fallen to 4.83 percent, its lowest level since November 2009, according to the Mortgage Bankers Association.
New car loans? Interest rates fell in March after hitting a peak in February, according to the Federal Reserve.
Credit card rates? They've declined for five weeks running, according to CreditCards.com.
And the Federal Reserve is likely to lengthen the period it keeps interest rates exceptionally low because of the uncertainty caused by the euro crisis.
According to Fed minutes released Wednesday: "Nearly all members judged that it was appropriate to reiterate the expectation that economic conditions ... were likely to warrant exceptionally low levels of the federal funds rate for an extended period."
And that consensus, reached in late April, "was before the recent escalation of the fiscal crisis in Europe, which forced the Fed to reopen its liquidity swap lines with the ECB [European Central Bank], the plunge in equity prices, the news of a slump in core inflation to a 44-year low in April, and a 20 percent decline in oil prices," points out Paul Dales, a Toronto-based economist at Capital Economics, in a written analysis.
"It is clear that US rates will be on hold at near-zero for some considerable time, perhaps even until 2012," he writes.
That should give buyers of homes, cars, and other consumer goods some time to take advantage of low interest rates.
Credit card debt: Are consumers returning to bad habits?
New Year's resolution (and modern fable): Spend more!
In budget battle, voters are the 'adults in the room'
Is the curtain falling on the eurozone?
FedEx delivery video: Package thrown. FedEx apologizes on YouTube.
Subscribe Today to the Monitor