CNN Marketplace 2006-02-01

（单词翻译）

Stocks ended the day little changed after the Federal Reserve did, well, what it was expected to do. I'm Gerri Willis in New York for CNN. com.

The Fed, one last time under Alan Greenspan, raised its key short-term interest rate by a quarter point to 4. 5%. It signaled that further rate hikes could still happen, but it dropped a long-standing phrase about measured rate hikes, a hint that another increase is not guaranteed. The Fed has now raised rates 14 straight times since June of 2004.

At the close, the Dow Industrial's lost 35 points, the NASDAQ finished slightly lower.

So how do these rate hikes affect consumers?

Well, home equity¹ lines of credit are affected² most. They are generally tied to the prime rate which usually moves in locked step with the rates set by the Fed. When the Fed began raising rates 19 months ago, the average rate on the home equity line of credit was about four and two thirds percent, but today it's approaching 8%.

Here's what that means to your pocketbook. If you're taking out of $100, 000 home equity line of credit, it would cost you an extra $3, 280 in annual interest expenses than it would have before the Fed started its rate hike campaign. On the other hand, longer term hot rates like mortgages have been virtually immune to the rate hikes. The 30-year mortgage, for example, is actually slightly lower than it was 19 months ago when the Fed started raising rates.

Those who carry credit card balances could be in for higher payments. Rates on variable rate credit cards often rise and fall along with the prime rate. And for savers, higher rates can be good news. Many banks and credit unions have been sharing the Fed's rate increases with customers, especially on short-term CDs.

That's the latest in business news. I'm Gerri Willis in New York for CNN. com.