In a widely anticipated move, the Federal Reserve has hiked interest rates by 25 basis points or 0.25%. Fed Chair Jerome Powell said the extent of future rate hikes is uncertain, indicating that they will take a wait and see approach. Remember, this is the eighth increase since the first one in March 2022 to combat inflation.
So, in light of these rising interest rates, we want to discuss the impact that these rising rates may have on your wallet. Of course, anything that has an adjustable interest rate is set to go up, for example, home equity lines, credit cards, auto loans, and some student loans if they are attached to either the prime rate or a variable rate index. Also, of course many people are speaking about mortgage rates which are actually following the 10-year treasury yield and have seen a significant decline in rates since the fall. So, given this data, if you’ve bought a home in the last four to six months, make sure you re-visit the rates currently and your rates. If you need help assessing your situation, we are here and happy to help you!
So, given the anticipation of future rate hikes, think about your savings rates and make sure you are earning higher rates on your savings. If you are still earning zero or close to zero in your FDIC insured savings or checking account, seek a high-yields savings account to earn more interest on your dollars. We know that the current economic environment is constantly changing and you are adjusting to this inflationary and higher-interest rate climate, it’s important to stay on top of your interest rates and know what you have.
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