DORAL, FL – The Federal Reserve is expected to implement a new interest rate hike on Wednesday with the purpose of taming inflation that annually fell to 8.2% but rose by 0.4% on a monthly basis.
This will be the sixth time throughout the year that interest rates go up although many experts consider the measures have done little to control prices.
The central bank has already raised its benchmark interest rate by 3 percentage points since March, and today it’s expected to tack on another 3/4 of a point, which is the most aggressive string of rate hikes in decades. In fact, if the Fed raises interest rates at 75 basis points, it would mark the fourth straight increase at that high level.
This interest rate hike will affect mainly consumer’s pockets that will face more expensive prices to get a mortgage or pay off credit card debit. For this reason, many economists highly advise not to put in more debt during this time ahead of the holiday season.
Also, there are concerns the measure could ignite a recession. While two consecutive GDP contractions in the first two quarters this year signaled a potential recession, the National Bureau of Economic Research looks at a broader range of economic activity, including employment, retail sales and industrial production, before making a statement about when could recession begin and end.
Having said this, most economists don’t believe the U.S. is in a recession, according to USA today, citing “slowing but still-vibrant job growth”.
Photo by: Unsplash.com