The Federal Reserve took the unusually considerate step of raising the interest rate again while providing that banks could not raise the mortgage rates on people who already have mortgages with them.
While the banks called foul, the new head of the Fed commented, ?I think it?s time to be forthright about how the Fed manages the economy and the consequences of it. As you know, when the economy slows down, we lower the rate to stimulate it, which inevitably results in people going out and buying homes for the simple reason that they can now afford them. Then when the economy picks up, we raise the rates, which has always meant the mortgage rates go right up with it. So a lot of these people can no longer afford their homes. Well, it?s time to end the carnage and come to the rescue of these poor suckers. Banks can raise the rates accordingly but only on new mortgages.?
?Ruined, ruined ? we?ll be ruined!? a spokesman for Citibank wailed, as it declared record profits.
?This will break us,? a spokeswoman for Bank of America bemoaned.
Their comments soundly reminiscent of the cries that have until now echoed through the hallways of homes that would otherwise, in the wake of rising rates, be foredoomed to foreclosure.