Business Services Industry

Higher interest rates.

Kiplinger Letter, The, July, 2004

HIGHER INTEREST RATES

The Fed is far from finished, but we expect a pre-election pause.

Rising interest rates mean money will cost more and the relative value of investments will shift. To take advantage as well as to shield yourself against damage, take a close look at how rate changes will impact both your business and personal finances. Here's where we see things headed:

THE ECONOMY CAN HANDLE RATE HIKES. There will be no major disruptions. Shifts will be gradual and relatively mild, and slightly higher rates will have the beneficial effect of muffling inflationary pressures without stalling economic growth.

But consumer spending growth will slow, dipping from near 4% this year to under 3.5% next year. Housing, autos and other...

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