Federal Reserve Chairman Jerome Powell sent markets soaring in late November when he spoke at the Economic Club of New York and instilled investors with confidence that the nation’s central bank would slow its onward roll toward raising rates. Powell’s comments carry clout any day of the week, but with 2018 and 10 years of economic growth both coming to a close, the Fed’s words and its decision to raise, lower or leave rates alone in 2019 are being closely watched from both Wall Street and Main Street.


“I think to look at that speech, you have to back up to the speech he gave in October, where he hinted that there were going to be a lot of rate increases, which sent the market into a correction,” Legend Bank Sherman President Matt Brown said. “In this most recent speech, what he said was kind of his way of walking back or going a little softer on his stance in order to help the market feel like it has a little bit of indication that it knows where it’s headed.”


Speaking in late November, Brown said he and many others in the banking and investment industries think rates are headed for a .25 percent increase by the year’s end.


“At the end of day, it’s my opinion that they’re raising these rates to get to a level so that, if we have another economic downturn, they have a lever they can pull to back rates off and stimulate growth,” Brown said.


With the housing and real estate markets highly influenced by the Fed rates, Brown said a quarter-point increase would, as predicted, have effects at all levels.


“If the interest rates go up on say a $200,000 rent house, that’s $25 more in monthly payment that John Q. Public’s probably going to foot and can’t afford to pay in property,” Brown said. “It’s the same way with people that are buying large pieces of commercial land or commercial properties for investments. The higher the interest rate, the less they can afford to pay for that property and generate the type of return they want.”


Brown said the DFW housing market seems to have lost steam recently, but from his perspective in Sherman, he thought the local housing market would fare all right in the event of a modest rate hike in 2019.


“As far as North Texas, and even in Sherman, I think we have a lot of job growth coming to the area thanks in part to the EDC (Sherman Economic Development Corporation) and the projects they’re bringing into town,” Brown said. “I don’t think you’re going to see a major hit in the housing cost in Sherman. But I’m no expert, I’m just a banker.”


Ahead of a potential rate increase by the Fed, Brown said consumers may see commercial rates, such as those on credit cards, rise first amid anticipation.


“At this stage of the game, and as a consumer, I’m looking for something that’s got a fixed rate to it,” Brown said. ” I’m being disciplined in my spending, and I’m not buying something unless I really need it. I’m trying to be disciplined in my spending, keeping all my consumer debt, as far as the cars, credit card debt and house, at rates that are somewhat fixed at that time and not at rates that can continue to go up.”


While only the central bank can say for certain what it will do with rates in the coming year, Brown said investors and consumers can largely avoid losses by following the Fed.


“I think as long as you’re paying attention to the rates and the factors affecting you, then it shouldn’t catch you by surprise,” Brown said.