20 Second Advisor: Fed Rate Hike- What it means for you
Inflation is at a 40-year high. Just last week, the Fed raised its benchmark rate .25%. In theory, the rate hike increases a number of borrowing costs, which slows demand for goods and taps the brakes on inflation. The Fed has indicated that further rate hikes are in store. If we continue to see further rate hikes, we will see increased rates in the following:
- Home loans- these are tied to track the yield of the 10-year Treasury bonds; consider locking in a rate now if you are thinking about refinancing or buying a new property
- Credit cards- expect to pay more in interest for any credit card debt; consider a 0% balance transfer
- Student loans- if your loans have a variable rate, consider refinancing the loans to a fixed rate
- Car loans- expect the interest rates on car loans to go up as well; they track the five-year treasury