What a third hike in interest rates could mean for consumers
They just raised it half a percentage point back in May and this is all to help lower inflation. Experts said this will be the third hike this year and likely the biggest one yet, but you should already be seeing some of the effects from the first two.
The Welch Group Financial Expert, Marshall Clay, said the previous hikes are why you’re seeing higher interest rates for credit cards and spikes in mortgage rates. Clay said this hike is expected to be higher than half a percentage point because of June’s consumer price index numbers. He said those numbers show how interest rate increases are impacting inflation.
“I think it really depends on those inflation numbers, so those are going to be really important days when we get to middle July, August, and September,” Clay said. When they announce the consumer price index numbers and we see weather or not those interest rate increases are having an effect on the inflationary dynamic.”
He said those numbers will tell us if the interest rate hikes are working.
“If these interest rate increases don’t have any effect, we can continue to see inflation moving upward, and it’s going to continue to be a problem,” Clay said. “If we see those numbers start to come down, it may suggest to the market that the federal reserve is not going to have to take such extreme steps to squash the inflation, maybe there can be relief.”
Clay said you’re not going to see prices start to come down over the next few weeks with these hikes. He said it will likely be six months to one year before inflation could start to lower and correct.
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