Now that interest rates have been hiked, the next issue will be what the inflation rate for July will be. The spiel is that the inflation rate is expected to breach 5% — which is why the BSP raised rates.
So, IF inflation does breach 5%, that means your money has to work harder in order to really grow. Has it? Have you been keeping track?
Second, rising rates are usually bad news for people with outstanding loans. Do you know how the interest rate on your loan is calculated? It MAY be fixed today but what about next year? The year after that? You should definitely make it a point to review all loan documents and check if the rate will be repriced, and if so, when. Do NOT assume that just because it hasn’t changed for the past couple of years that it will NEVER change. Always, always check the fine print.
Third, real-estate firms are especially vulnerable to rising rates — especially if their primary market cannot pay the rising rates. So, if you have invested in stocks of property firms (Investor ha, hindi TRADER) for the “Long-Term”, now would be a good time to review the business and see if it can adjust to the new environment.
Lastly, traders can benefit from the expected volatility in the coming days as the market tries to digest this bit of news as well as figure out if this rate increase is a one-time thing or a sign of more increases in the future.