TODAY | June 22, 2013
>>> it's been a wild week on wall street . the dow rebounding slightly on friday after losing 550 points the previous two days. what's happening here? what should you do with your money and how concerned should you be. kayla is here with answers. good morning.
>> good morning. i hope i have the answers for you.
>> no pressure, right? give us a sense, at this point, what spooked investors?
>> for the first time, ben bernanke talked about scaling back a massive economic program. this has been four years of trillions of dollars the fed has been pumping into the economy to lower interest rates , encourage borrowing and improve the labor and housing market . when he mentioned that, investors knew it couldn't go on forever. hearing it caused a knee-jerk reaction. they thought he's not quitting cold turkey . unemployment needs to improve a little bit more and needs to be more growth in the economy.
>> you talked about interest rates . that's a major concern for people, not just when it comes to mortgages, but student loans as well.
>> everything you do is tied to the interest rate , whether you like it or not. whether you have an existing loan or taking out a new loan. if you have a variable rate , those could go up in the near term. they change with the market. if you have a fixed rate loan, it stays the same. if you are taking on a new loan, make sure you look closely at your mortgage. new mortgages, they also move with the market. we are seeing a 30-year fixed at nearly 40%. it's climbing. if you want take out a new mortgage, it's narrowing. credit cards , student loans , auto loans, other types of debt are tied to the federal reserve . those rates are likely to stay low. if you don't need one, don't rush to get one.
>> good advice. as we look ahead to the week, a knee-jerk reaction. looking ahead to the week coming up would be calmer.
>> one would hope but unfortunately, the market that we are in right now, we get data about jobs, about housing and about the global economy every single day. the market wants to see those numbers keep moving in the right direction. as long as they do, the market will move in the right direction. if you see one blip on the radar, expect a knee-jerk reaction. we saw numbers out of china and it was a pile on effect from the federal reserve this week, too. a lot of things contributing to it.
>> when you see the people who make the decisions who affect the market, we are talking this knee-jerk reaction. as investors and layperson you are in it for the long haul, bumps along the way. you have to ride it out.
>> you have to ride it out. there will be some bumps along the way. economic experts say the markets will still go up. some say by the end of this year, could be up 15% higher.
>> dow is up 13% for the year?
>> 13% for the year. it could keep going up. it's just below 15,000. some say it could go up to 18,000. you are going to see sharp sell offs. ben bernanke speaks in august and again in the fall. you are going to have two choppy rides and have a steel stomach.