Interest-rate hike affecting local residents already

The Federal Reserve increased interest rates by the biggest margin since 1994.
The Federal Reserve raised interest rates by the highest margin in nearly 30 years this week.
Published: Jun. 16, 2022 at 7:30 PM EDT
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CHARLOTTE, N.C. (WBTV) - We’re seeing a massive jump in interest rates with the Federal Reserve increasing rates three-quarters of a point yesterday, an increase that hasn’t been made in nearly 30 years.

That decision to hike rates made by bankers in Washington yesterday will have very real and nearly immediate impacts on your wallet.

WBTV talked to an expert to get a better understanding of what you can expect.

“It’s something to pay attention to also because it impacts our pockets,” Danny Rowe said.

After Jessica Mielec heard about this interest rate, she texted her husband ‘this is a bad thing right?’

“For my sister who is interested in buying a house, it’s a complete game-changer in terms of what they can afford,” she said.

It didn’t take long for some in Charlotte to realize their finances might soon get a little tighter as the Federal Reserve continues its plans to hike interest rates.

“It drives up all kinds of things, whether it’s student loans or credit cards, anybody carrying debt it’s definitely going to have a huge impact,” John Hartnet said. “I hope their efforts are fruitful and in helping slow down the burn.”

“The cost of borrowing is greater, so people don’t have the flexibility,” Steve Cox, a professor of marketing, in the McColl School of Business at Queens University of Charlotte, said.

In simple words, it will cost more to borrow money for big purchases like a house, car, student loans and business loans.

Cox said the rate-hike plan is the Fed’s main strategy to battle inflation.

“The Feds said we don’t have a lot of tools, the interest rate is the tool to cool inflation,” he said.

Some feel the increase in interest rates will pinch consumers more with the cost of things already high.

“It just seems like everything is just piling on and just making it harder for people to kind of, not even just get ahead, but survive,” Mielec said.

Experts say now is the best time to figure out your budget and pay down your credit-card debt.

If a big purchase needing credit is not necessary right now, it may be best to wait, but you should contact a financial adviser to help your figure out things.

Related: Watching Your Wallet: Interest rate hike good for savers, hard on borrowers

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