The March preliminary Money Anxiety Index decreased 1.4 points to 58.0 since the beginning of this year indicating improved financial confidence. Lower level of money anxiety increases consumer spending, which promotes economic activity and jobs growth.
The gradual decrease in the level of money anxiety enabled the Federal Reserve Bank (The Fed) to come very close to satisfying its two mandates of maximizing employment and stabilizing prices. The Fed started increasing the funds rate in December of 2015, and since then the Money Anxiety Index decreased by 4.5 index points indicating that consumers feel more confident about the economic recovery.
An increase in the funds rate on March 15 means that borrowing cost, including mortgages, will increase slightly as well as interest rates on bank and credit union deposits. However, deposit rates are likely to increase mostly for certificates of deposits (CDs) of 1 to 5 years, but not for any of the liquid accounts such as checking, savings or money market.