(WWLP) – The Federal Reserve is raising interest rates by half a percentage point. 22News has what this change means for your wallet. This increase, the biggest in two decades, is considered an aggressive move to fight inflation.
Inflation is making life hard for many Americans who are struggling to cover the costs of keeping food on the table, gas in their tanks, and their homes warm at night. The Federal Reserve is taking steps to fight this inflation by increasing interest rates by half a percentage point. Unfortunately, this means the average person will see borrowing costs go up on things like credit cards, home equity lines, and adjustable-rate mortgages, but the news is not all bad.
Matthew Farkas, Senior Vice President at St. Germain said, “There will be some benefit to it, fed policy typically translates into higher lending rates I should say so eventually things such as saving rates or CDs. We should see those interest rates also start to increase.”
A key takeaway from this is that the federal reserve is able to raise the interest rates because the economy is on stable ground. The job market is strong and the average person does not have too much debt.
Farkas added that now is a great time to start paying your debt down and looking around for more a competitive rate for your savings account or CD.