One expert says it’s still cheap for Iowans to borrow money, even though the Federal Reserve Board raised its key interest rate again this week. Financial advisor Vince Boberski says there are two reasons mortgage and home loan interest rates are still very low: the first is that U.S. inflation is being held in check. Boberski says “The second thing is a byproduct of our trade deficit, that overseas central banks, particularly in Asia, have been big buyers of the treasury market and that has helped to keep rates what some might say artificially low.” Contract mortgage rates are at five-point-95-percent, up five-hundredths of a point from a week ago. While inflation is generally in check, Boberski says just a few things are responsible for the rise in prices we’re seeing in some areas. He says “Energy, raw materials, education and health care; those are industries with a lot of pricing power and they’re able to pass along higher costs to consumers.” Boberski says prices for the vast majority of things we buy are holding steady — with the obvious exceptions of energy and health care. He says “If you look outside of those industries there’s not a lot of pricing power so for a lot of the things that we buy, maybe they’re not as conspicuous as going to the gas station and filling up, but there’s really not a lot of price movement there.” In the last year, consumer prices have risen three-percent overall — that’s down from a three-and-a-half percent in November.
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