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It’s pricey to borrow to buy a business, car or home these days. Interest rates are expected to fall in coming years — how much is up for debate.
Dr. Alice Mills was thinking of selling her veterinary practice in Lexington, Ky., this year, but she decided to put the move off because she worried that it would be difficult to sell in an era of rising interest rates.
“In a year, I think that there’s going to be less anxiety about the interest rates, and I’m hoping that they’re going to go down,” Dr. Mills, 69, said. “I have to put my faith in the fact that the practice will sell.”
Dr. Mills is one of many Americans anxiously wondering what comes next for borrowing costs — and the answer is hard to guess.
It is expensive to take out a loan to buy a business or a car in 2023. Or a house: Mortgage rates are around 7 percent, up sharply from 2.7 percent at the end of 2020. That is the result of the Federal Reserve’s campaign to cool the economy.
The central bank has lifted its policy interest rate to a range of 5.25 to 5.5 percent — the highest level in 22 years — which has trickled out to increase borrowing costs across the economy. The goal is to deter demand and force sellers to stop raising prices so much, slowing inflation.
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