Marquette, Mich. (WZMQ)- A .75% hike in interest rates could affect borrowers in the upcoming months. The Federal Reserve has raised its key interest rates, those rate hikes will mostly affect consumer and business loans, but if the fed continues to raise the traits the effect could be felt across the nation.
Last week the fed increased interest rates, raising the cost of borrowing money. increased rates will work to slow down the rising inflation, but as they continue to creep up, people across the country will feel the effects.
Dr. Joshua Ingber is the assistant economics professor at NMU, according to him over the pandemic, the fed made moves to keep the economy working quickly, introducing stimulus bills and keeping interest rates low. now, Ingber says with these pandemic effects, the fed is making an attempt to slow inflation down. – “This is going to meet itself out for people differently, you know, I worry about here wages not keeping up with say prices at the grocery store. I don’t see, ya know, I see maybe the inflation slowing, but still increasing. and time will tell whether this is a recession but I think the smart money is that this is going to, that the inflationary pressure we’re not at the end of that pain.”
over the past year rising inflation in prices has been seen across the country. many point fingers at the pandemic causing prices to rise, but economists are warning that it’s not quite that simple. Dr. Ingber explained that “when you have something like COVID hit with loose monetary policy, we decide to add a lot of money into the economy and at the same time you have supply chain issues, Russia goes to war with Ukraine, puts pressure on oil prices, so you see it in the price of food and the price of plastics and all these things.”
He also stated that “the fed is trying to thread a needle as it were. where they’re to not create the rescission that happened in the late 70s early 80s. inflation doesn’t meet itself out like a light switch it doesn’t happen immediately and like a stone kind of hitting a pond, it reached the shore at different times so not everyone is equally feeling the pressure on prices”
the fed has signaled that this won’t be the only increase we see before the end of the year, and there will be more to come in 2023. as the fed continues to push interest rates higher to slow down the economy, dr. Ingber and other economists worry it will slow down too much. Ingber says there’s no way to predict for certain what’s to come, and if it is a recession the hope is, it’s a shallow one and a quick recovery.