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You can count on the Federal Reserve to keep raising interest rates this year, which will mean higher rates for borrowers, experts say in a new Bankrate survey.

“The Fed will continue to take baby steps in raising rates, but the frequency will increase” says Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida.

Borrowers beware: If you’ve got credit cards or a home equity line of credit (HELOC), you may want to start paying down some of that debt. When the Fed hikes rates again (and again), you’ll be the first to feel it.

Overall, the outlook is positive, according to top economists who participated in Bankrate’s second-quarter 2017 Economic Indicator survey. They expect employers to keep adding jobs at a healthy clip, and the unemployment rate to remain low.

Economic forecast at a glance: Q2 2017

While the forecasters anticipate moderate economic growth, the overwhelming majority doubt we’ll hit President Donald Trump’s 3 percent annual growth target.

Interest rates rising soon

The economists believe another Federal Reserve interest rate hike is imminent:

When with the Fed raise rates?

  • 80 percent say it’s likely to happen later this month
  • 15 percent think the Fed will wait until July
  • 5 percent say the Fed will wait until October or later

The Fed has raised rates three times since December 2015 but left its key interest rate unchanged in May. The next meeting is scheduled for June 13-14.

“The economy is showing reasonable strength, and with inflation near the Fed’s target, the Fed deems it necessary and prudent to continue its slow process of ratcheting rates upward,” says Bernard Markstein, president and chief economist with Markstein Advisors.

A possible June rate hike leaves consumers with only a little time to take defensive action rising interest costs. Consider transferring balances to a low- or zero-interest credit card.

Mortgage rates going up?

The yield on the 10-year Treasury note — a benchmark for mortgage rates — is around 2.2 percent. We asked survey respondents to estimate where the yield would stand 12 months from now.

Where will a key interest rate stand 12 months from now?

  • 60 percent say yields will rise to a range of 2.5 percent to 3 percent.
  • 35 percent predict yields above 3 percent. (Note, that’s down from nearly half who felt that way in our last survey.)
  • 5 percent say yields will remain below 2.5 percent.

If Treasury yields increase and mortgage rates follow, homeowners should be proactive, says Greg McBride, CFA, Bankrate’s chief financial analyst.

“Homeowners looking to refinance should be prepared to act quickly any time there is a pullback in mortgage rates,” he says.

Bankrate’s most recent weekly survey puts mortgage rates at a six-month low.

Getting closer to full employment

Job growth should continue at a moderate pace over the next year but may slow slightly. Among survey respondents, the average forecast is for monthly job gains of 172,250 one year from now. In April, the economy added 211,000 jobs.

Amid gains in hiring, unemployment will likely continue to fall. On average, the economists expect the jobless rate to hit 4.36 percent 12 months from now. The April 2017 rate was 4.4 percent.

Low unemployment is one of the Fed’s major monetary goals — further proof that the central bank may soon lift rates.

“The tighter labor market will bring about higher wages, but will also bring about more action from the Fed,” McBride says.

Savers eager for higher rates shouldn’t take a wait-and-see approach. Start comparing top rates for short-term CDs and high-yield savings and money market accounts. Your investment portfolio should have the right mix of stocks and bonds based on your risk tolerance.

3 percent economic growth?

Following the weakest first quarter for economic growth in three years, the economists are slightly less optimistic about further expansion in the economy. The average projection for annual growth rate in GDP is 2.41 percent, down from a 2.5 percent forecast in our first-quarter survey.

However, 95 percent of the forecasters say the economy isn’t likely to reach sustained annual growth of 3 percent or higher during President Trump’s current term. That’s the target he has outlined with his budget and tax plans.

“Even if all the administration’s proposals are implemented in their most pro-growth form, slow labor force and productivity growth act as speed limits and will prevent sustained growth of 3 percent or higher,” says Mike Fratantoni, chief economist at the Mortgage Bankers Association.

Not sure what the future may hold for your own finances? Find an expert who can help you make the right money decisions.

The second-quarter 2017 Bankrate Economic Indicator survey of economists was conducted May 9-17. Survey requests were emailed to economists nationwide, and responses were submitted voluntarily online. Responding were: Scott Anderson, chief economist, Bank of the West; Bernard Baumohl, chief global economist, The Economic Outlook Group; Scott Brown, chief economist and senior vice president, Raymond James Financial; Gregory Daco, chief U.S. economist, Oxford Economics; Robert Dietz, chief economist, National Association of Home Builders; Bill Dunkelberg, chief economist, National Federation of Independent Business; Michael Fratantoni, chief economist, the Mortgage Bankers Association; Seth Harris, former acting and deputy U.S. secretary of labor, now visiting lecturer, Cornell University Institute for Public Affairs; Robert Hughes, senior research fellow, American Institute for Economic Research; Hugh Johnson, chairman and chief investment officer, Hugh Johnson Advisors; Jeremy Lawson, chief economist, Standard Life Investments; Bernard Markstein, president and chief economist, Markstein Advisors; Lindsey Piegza, chief economist, Stifel Fixed Income; Lynn Reaser, chief economist, Point Loma Nazarene University; Amy Schmidt, associate professor of economics, Saint Anselm College; John Silvia, chief economist, Wells Fargo; Sean Snaith, director, Institute for Economic Competitiveness, University of Central Florida; Phillip Swagel, professor of international economic policy, University of Maryland; David Wyss, adjunct professor, Brown University; Lawrence Yun, chief economist, National Association of Realtors.

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