Fed rate of interest hike pushes up native mortgages

Insurance sector expects to ration costly cover

(CNS): The US Federal Reserve raised interest rates by a quarter percentage point this week, the eighth increase in less than a year in the battle against inflation. Though the hike was the smallest since March last year, it will still push interest rates on local loans and mortgages to at least 7.5%. This rapid boost in borrowing costs is likely to slow down, with signs of smaller hikes to come. But even as the higher interest rates have begun cooling inflation in the United States, prices are still climbing.

“We’re going to be cautious about declaring victory and sending signals that we think the game is won because we’ve got a long way to go,” US Fed Chairman Jerome Powell told reporters on Wednesday.

Here in Cayman, the cost of monthly mortgage payments has doubled over the last year at a time when the local inflation rate has reached record levels, running at 12% in the summer but dropping to 9.2% at the end of September.

The latest increase in loan…