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The United States is entering a new economic era as the Federal Reserve has been hiking its benchmark interest rate.

Interest rates today stand above 5% as the Fed tries to slow the economy down and fight inflation. As interest rates climb, economists say financial conditions are headed back to being more normal.

“Having interest rates at zero for such a long period of time is very unusual,” said Roger Ferguson, a former vice chair at the Federal Reserve. “Frankly, no one ever thought we’d get to that place.”

Back-to-back financial crises gave past Fed policymakers the conviction to take interest rates as low as they can go, and keep them there for extended periods of time. Along the way, they disrupted the basic math of personal finance and business in America.

For example, the Fed’s unconventional policies helped to sink the profits investors received from safe bets. Government bonds, Treasury securities and savings accounts all return very little yield when interest rates are low. At the same time, low interest rates increase the value of stocks, homes and Wall Street firms that make money by taking on debt.

As the Fed hikes interest rates, safer bets could end up paying off. But old bets could turn sour, particularly those financed with variable loans that increase alongside the interest rate. A wave of corporate bankruptcies is rippling through the U.S. as a result.

“You’re, to some extent, limiting nonproductive investments that would not necessarily generate revenue in this high interest rate environment,” said Gregory Daco, chief economist at EY-Parthenon. “It’s very different in a low interest rate environment where money is free and essentially any type of investment is really worth it because the cost of capital is close to zero.”

In recent years, economists have debated the merits of zero lower-bound policy. As the Fed lifts that federal funds rate, policymakers warn that rates may stay high for some time. That could even be the case if inflation continues to subside.

“Barring a catastrophe, I don’t think we’ll see lower interest rates any time soon,” said Mark Hamrick, Washington bureau chief at

To view CNBC‘s ‘How The Federal Reserve’s Interest Rate Hike Are Reshaping The U.S. Economy‘, click the arrow below:


Source: CNBC

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Propelled by scorching demand, rising prices and a torrent of new construction, South Florida’s property values have escalated steeply, providing a boon to owners of homes and commercial and industrial real estate — but also raising the prospect of big tax hikes and a deeper housing affordability crunch.

Preliminary estimates of taxable property values just released by Miami-Dade and Broward counties show valuations for all types of property rose more than 10% overall in both counties as of the end of 2021 compared to the previous year. That’s faster than values had risen in many years.

In Miami-Dade, property values increased at an overall annual rate not seen in 15 years. Countywide, the taxable value of properties rose by $34 billion to a total of $372 billion, or a whopping 10.2% jump, between 2020 and 2021. New construction accounted for $5.292 billion of that increase.

Pedro J. Garcia, the Miami-Dade property appraiser, said in a statement the county last saw an overall double-digit increase in values in 2007. The 2021 growth rate nearly triples the level of increase recorded in 2020, when South Florida’s taxable property values rose significantly in spite of widespread economic impact from the start of the ongoing COVID-19 pandemic.

The biggest increase by far came in the small city of Sweetwater. Largely due to an annexation in late 2021, the city’s property values rose a head-spinning 56.3%. It also has seen a boom in high-rise residential construction catering to Florida International University, which sits across Southwest Eighth Street in west Miami-Dade.

Unusually, every single municipality and taxing district in Miami-Dade, as well as unincorporated areas, saw a substantial increase in taxable property values. That includes some, like the area covered by Miami’s Downtown Development Authority, a special tax district stretching from Brickell to Edgewater, that had seen a slight decline in values the previous year.