The Federal Reserve is expected to consider lowering interest rates, which would positively impact consumers by reducing borrowing costs. Higher rates have dissatisfied consumers despite better savings account returns. Lower rates could create opportunities for investments, particularly in real estate investment trusts (REITs) that typically carry heavy debt. If interest rates decline, REITs could benefit from lower debt expenses, leading to increased share prices. This presents an advantageous moment for investors to acquire REITs before prices rise as rates fall.
Interest rates have been elevated since the start of the year, and many consumers are unhappy about that. Although higher interest rates can mean better returns in savings accounts and CDs, they can also make borrowing very expensive.
Not only could lower interest rates make it cheaper to sign loans, but they could also have an impact on certain investments.
When you, as a consumer, want to borrow a lot of money, higher interest rates can add to your costs. The same applies to companies that have heavy debt loads.
If interest rates start to fall, REITs may find themselves with lower debt costs. That could drive REIT prices upward.
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