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Big day today.  Alan Greenspan's 18-year run as Fed Chief ends and Ben Bernanke should become the new leader (if the Senate votes him in).

Think Bernanke had a rough night's sleep?  He went to bed as a former Ivy League professor and is waking up as the eminent leader of the world's largest economy's banking system.  Wow.

First things first -- most of the news today will focus on every except the increase in the Fed Funds Rate.  That will be almost an after-thought. 

So, let me remind you.  The Fed Funds Rate is the interest rate at which banks borrow from the government's banking system.  It's considered to be short-term money.  If the Fed Funds Rate increases, the banks usually pass on that cost to you for your short-term money, too.

What is "short-term money"?  Think Home Equity Lines of Credit and credit cards, most notably.

So, if the Fed Funds Rate increases, so does your cost of borrowing on your HELOC and on your credit cards.  While you weren't paying attention, that rate of borrowing has increased dramatically.  Less than two years ago, Prime Rate was 4.00%.  Today, it's expected to increase to 7.50%.

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.