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More Than Half of Investors Approve of Interest Rate Increase

This week’s Sentiment Survey special question asked AAII members for their thoughts about the Federal Open Market Committee’s (FOMC) recent decision to raise interest rates. Slightly more than half of all respondents (51%) approved of the increase. Many of these respondents thought it was necessary. An additional 15% of respondents described the increase as being expected and/or already priced into the market, while 11% thought that it was about time rates were raised again or otherwise viewed the hike as being overdue. Slightly less than 12% of respondents either disapproved of the hike or expressed concern about it potentially doing more harm than good.

Here is a sampling of the responses:

  • “Everyone anticipated it, so I don’t think it will have a significant impact.”
  • “I think rates will be raised, but at a rather slow pace. This will provide a good environment for the stock market.”
  • “I am concerned they will raise rates too quickly and that will lead to a recession.”
  • “If they continue to raise rates gradually and no more than three times in 2018, we should be okay.”
  • “I’ll be glad to earn a little more interest on my cash.”
  • “Long predicted and needed as the economy strengthens.”

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