Student Loan Rates Go Up on Saturday - more to follow.

The Federal Open Market Committee (FOMC) of the Federal Reserve System makes key decisions about interest rates which control the growth of the United States money supply.

Money and water follow similar laws. Water flows down to the lowest point. Money flows up to the highest return. When the FOMC lowers rates the money supply expands as money flows from Treasury bonds, bills and notes seeking higher rates from other investments. When FOMC raises rates, the US money supply shrinks as fund flow from those other investments back into the Fed to purchase Treasury bonds, bills and notes.  

When FOMC raises rates it affects many things in the private sector -- interest rates on everything from car loans, home mortgages, business loans, student loans, etc. will rise. Interest rates on government securities will also rise, meaning that the federal government will have increased borrowing costs, which means the interest citizens are paying on the national debt will increase too. And many other debt instruments including bonds issued by cities, states, school districts, etc. will have rates going up and citizens having to pay more.

The Federal Reserve raised short-term interest rates by a quarter point at the last meeting of the on Wednesday. It's the Fed's third rate hike since December. On Saturday, July 1, interest rates will rise on new student loans for undergraduates from 3.76 to 4.45 percent. Graduate students aren't spared: Their rates go from 5.31 to 6 percent. Rates were set based on the Treasury Department's May 10 auction of 10-year notes. 

The Federal Open Market Committee (FOMC) of the Federal Reserve System makes key decisions about interest rates which control the growth of the United States money supply.

Money and water follow similar laws. Water flows down to the lowest point. Money flows up to the highest return. When the FOMC lowers rates the money supply expands as money flows from Treasury bonds, bills and notes seeking higher rates from other investments. When FOMC raises rates, the US money supply shrinks as fund flow from those other investments back into the Fed to purchase Treasury bonds, bills and notes.  

When FOMC raises rates it affects many things in the private sector -- interest rates on everything from car loans, home mortgages, business loans, student loans, etc. will rise. Interest rates on government securities will also rise, meaning that the federal government will have increased borrowing costs, which means the interest citizens are paying on the national debt will increase too. And many other debt instruments including bonds issued by cities, states, school districts, etc. will have rates going up and citizens having to pay more.

The Federal Reserve raised short-term interest rates by a quarter point at the last meeting of the on Wednesday. It's the Fed's third rate hike since December. On Saturday, July 1, interest rates will rise on new student loans for undergraduates from 3.76 to 4.45 percent. Graduate students aren't spared: Their rates go from 5.31 to 6 percent. Rates were set based on the Treasury Department's May 10 auction of 10-year notes.

The US Constitution Article I. Section 8 states that one of the “Powers of Congress” is “To coin Money, regulate the Value thereof . . .” The Federal Reserve is a private corporation owned by banks. Maybe now would be a good time, for all of the folks being saddled with paying the increased cost created by those unelected people raising interest rates, to consider becoming more involved in learning how to use the power that Citizens have to change things like this. What do you think?