Ben Bernanke hints that the Fed might ease its long-running stimulus efforts. Stocks plummet and mortgage rates jump.
Neal Creech just keeps building homes.
"At some point, the economy has to run on its own," said the founder of 10-year-old Creech Custom Homes in Atlanta. "We've got enough steam going now."
Recent market gyrations and speculation about Fed policy are bringing interest rates back into play as a calculation for both businesses and consumers.
So far, many business owners such as Creech are reacting by not reacting -- hoping the economy is strong enough that they won't have to redraw strategies or rethink growth plans. Some may actually speed up plans to get rates while they're still low. But there's also concern higher borrowing costs could slow the recovery.
Housing is one of the sectors most heavily affected by interest rates. Both building and buying are fueled by loans -- if money gets tougher to come by or more costly to borrow, the fledgling housing recovery could stall.
Last week, the average 30-year mortgage rate climbed to 4.46 percent, from 3.93 percent a week earlier. Although the average rate moderated to 4.29 percent this week, the upward shift is prompting concern that other rates -- such as those for auto loans and business expansion -- might also head up.
Atlanta Realtor Mark Takacs said some home shoppers "are kicking themselves for not locking in earlier" but are not abandoning their home searches.
Atlanta broker Zac Pasmanick noted that mortgage rates are still historically inviting even with the uptick.
"I've been selling real estate since mortgage rates were 18 percent, so going from 3.5 to 4.5 percent is no big deal," he said. "We all knew interest rates were artificially low." His plans to sell his own home and downsize have not changed, he added. "I could live with 4.5 or 5 percent."
Caroline Kelly Simmel, vice president of Edward Andrews Homes, said there's no panic at her company.
"There's a long runway before higher interest rates would have a real impact," Kelly said. "I think it would be a few years before it really starts affecting anything."
In some regions, the improved housing market this year is due in part to investor-buyers scooping up properties they will rent for a time before reselling.
Atlanta-based Lima One Capital makes loans to those investors. President and founder John Warren said the rates he charges are not rising because the loans are usually short-term, and rates do not parallel regular mortgages.
Still, rising rates generally can affect how much consumers will pay investors for renovated and resold houses.
"As long as mortgage rates stay below 5 percent, people will continue to buy. I'd be skittish if they go higher," he said.
Josh Moffitt, president of Atlanta-based lender Silverton Mortgage Specialists, said he's becoming more cautious.
"The worry is how quick the market reacted. A 1 percentage point move in two weeks -- that's the biggest move in four years."
Silverton had planned to hire another underwriter, he said. "With rates moving up, maybe not. Now we have a job that might not be there."
More than real estate is affected, of course. All companies need capital, especially if they are not big enough to get respect from the large banks, said Andy McGhee, president of Atlanta-based Alostar Business Credit, which makes loans to firms.
For Alostar, higher rates are good news -- company revenues should go up along with rates, he said.
Higher loan rates could change the math for smaller businesses or franchisees trying to expand.
"We have been thinking about building or buying another hotel," said Rupen Patel of Sandy Springs, Ga., co-owner of a La Quinta Inn and Suites in Panama City, Fla. "But thinking about the rise in interest rates, we looked at the margins and we chose not to do that. We don't feel like working for the bank."
Yet the specter of expensive borrowing can also spur companies to expand more quickly.
Anna Cho, director of Cypress Academy, a tutoring company in Atlanta, said she's been planning to raise money and hire at least 10 software developers to build online technology for the company.
"This will speed up what we are doing, because it gets more expensive," she said.
The possibility that the era of rock-bottom rates could be ending also is nudging Bella Bag, an Atlanta company that buys, trades and sells expensive pre-owned handbags.
The company needs credit to keep its inventory at a target of 2,300 handbags. It also plans to open offices in other cities.
"With historically low interest rates, to be honest, it makes us want to accelerate our plan," said Brian Froehling, chief financial officer.
Impact on spending
As for consumers, the concern is that higher rates could dampen spending. On the other hand, they also could give savers more interest income.
Victor Castleman, 37, of Atlanta, said he and his wife pay off their credit cards each month and work hard to save.
"It kind of stinks because we have a lot of money in savings," he said. "From my standpoint, I don't mind if rates go back up."
Yet homebuyers are obsessed with low rates. Higher rates either mean they buy a cheaper home or pay more each month.
Jake Otto, 32, of Mableton, Ga., said the mortgage rate was 3.5 percent when he and his wife started construction of their home last winter. By late spring, it was rising, and the Ottos scrambled to "lock in." Otto said the lender neglected to do what he wanted and the rate jumped from 4.25 percent to 4.75 percent in less than two weeks. The lender eventually gave him the lower rate, he said.
"The difference was $150 a month."
Yet rates can be overshadowed by other factors -- such as price, location and the desire to own a home.
Hooman Shahbazi, 26, and his wife started looking for a new townhouse when rates were 3.5 percent. They have a contract, but they're still waiting to get their mortgage.
Because home values are rising, their home-to-be has risen in value too, which softens the pain of paying more than $100 a month with higher rates, he said.