Rate: Increases to 20 percent
The details: With the economy still struggling from the second recession in three years and continued double-digit inflation, the Fed raises the federal funds rate in late May to 20 percent. Public opinion polls show widespread disapproval with President Ronald Reagan's handling of the economy, and Democrats gain 26 U.S. House seats in midterm elections the following year.
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If you're thinking about refinancing, it may be a great time to lock in a rate.
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