Federal Reserve Increases Rate by .75% Again
For the second straight month, the Federal Reserve has raised its benchmark interest rate by .75%. This is the fourth rate hike since March and more are predicted in the coming months.
What does this mean for consumers?
This hike means the borrowing cost for buying a car, a home, credit cards, and more increases making the same transactions more expensive than if they were done last month. The Federal Reserve is hoping that by making borrowing money more expensive it will push down the demand for homes, cars, goods, and services allowing the supply chain to catch up and bring inflation closer to the 2% target instead of the 9.1% rate as it stands currently.
The housing market has been showing signs of a correction as sales have dropped nationwide for five months. According to the National Association of Realtors, 1.26 million homes are for sale which is up 2.4% from this time last year.
Credit card users would likely feel this change within the next few billing cycles as those rates tend to follow a hike. This means that those who carry a balance month to month should be prepared to pay more in interest per month and less on their principal if they don’t change the amount paid each month.
For more information on how the Interest Rate may affect you, please reach out to the professionals at The Center for Financial, Legal, and Tax Planning Inc. at (618) 997-3436 or by visiting our website at www.taxplanning.com.
*Disclaimer – The information in the article above is only for general informational purposes. It is not to be construed as financial, legal, or tax planning advice. Please consult with your financial and/or tax advisor before making any financial decisions. Please consult with your legal representative before making any legal decisions.