On Wednesday, December 16, 2015, the Federal Reserve officially announced they would gradually increase interest rates to a range of .25% to .50%.

 

The Fed raising the rates 25 basis points marks the first rate hike in nine years. The Fed felt comfortable raising the rate at this time due to the fact that November recorded steady growth in jobs and the economy has been on a steady if not upward trend.

 

This rate hike had been discussed at earlier Fed meetings this year. Due to the recent activity in the economy as well as the housing market maintaining a steady number of applications even during the winter months, the Fed had hinted at a rate hike being announced during its December meetings. The industry has been preparing for such an announcement by raising rates slightly earlier this week.