(WBAP/KLIF) — After Wednesday’s announcement by the Federal Reserve, borrowing money just got more expensive.
Fed Chairman Jerome Powell announced the board has raised interest rates to 5.5%, a quarter-percent increase which will affect a variety of lending options, including mortgages, credit card debt, and home-equity loans. Bankrate’s Greg McBride says effects of rate hikes take time to materialize, as corrections are expected to continue as 4.6% inflation is well above the fed’s 2% target rate.
The financial expert says that the increase will be felt over the next couple of statement cycles. He encourages consumers to check your home equity line of credit as it has likely doubled. The Fed has raised rates at the fastest pace in 40 years.
McBride indicates that the Federal Reserve paused rate hikes in June, but they’re back to raising rates in an attempt to curb inflation. Credit cards and other variable rate debt is going to cost more to finance, so McBride encourages consumers to pay down their balances in order to save money.
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