Stocks Down on New Interest Rate Worries

Ben Bernanke says the Fed will begin scaling back its economic stimulus program.
1:04 | 06/20/13

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Transcript for Stocks Down on New Interest Rate Worries
worries about interest rates on the rise. Wall street isn't happy about it at all. And abc's rebecca jarvis is here to explain. Good morning. And stocks are struggling to regain big losses today after the federal reserve signaled that change is coming. Chairman ben bernanke hinted that the fed will begin scaling back its economic stimulus program later this year because the economy looks like it's on the mend. Look at these numbers. The economy is expected to grow by at least 3% next year. Unemployment could drop as low as 6.5% by next year. It's all looking like better news. But on the flipside, interest rates are moving higher, which means that the cost of buying a home or buying even a car could go up. So, take a look at this. Every time that mortgage rates go up just 1%, the cost of buying a home gets 10% more expensive. That could deter a lot of buyers. And of course, higher interest rate, they do benefit some people like savers and retirees living off bank accounts and CDs. So, it's good news for those living on a fixed income, josh.

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