WHAT THE UPCOMING FED INTEREST RATE HIKES MEAN FOR YOU

WHAT THE UPCOMING FED INTEREST RATE HIKES MEAN FOR YOU

Written by Peter Boykin on July 27, 2022

WHAT THE UPCOMING FED INTEREST RATE HIKES MEAN FOR YOU

Shared By Peter Boykin – American Political Commentator / Citizen Journalist

The Federal Reserve is signaling that it will likely raise interest rates again, in an attempt to slow down the rate of inflation. Below, I’ll explain what an interest rate hike means for you. But first…

The details of the hike: The Fed will probably increase rates between 75-100 basis points. A basis point is equal to 0.01%. In June 2022 the Fed raised rates by 75 basis points (0.75%), which was the largest increase in three decades. Before that, it raised rates by 50 basis points in May 2022.

Here’s what all of this means for you…

💳 Credit cards: As the Fed rate rises, so will credit card rates. The average credit card interest rate is currently about 17%. If the Fed raises rates through the rest of the year [as they suggest they will], that average could go as high as 19% by end of the year.

That would be the highest on record.

🚗 Car loans: Car prices are already through the roof due to supply chain issues. Now buyers will have to worry about higher interest rates on their finance payments.

This Fed hike will push the average interest rate on a new car loan to 5%.

🏠 Mortage rates: If you’re looking to buy a home, expect higher mortgage rates. The average 30-year fixed-rate mortgage currently has a 5.27% interest rate [according to Nerd Wallet].

When the Fed raises rates, it will push this number even higher.

CNBC estimates this jump will cost buyers up to an extra $39,240 in interest [based on a 30-year loan with an average $405,200 home price]

Let’s go, Brandon…

[Source: CNBC]

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