Fed rate hike means consumers to pay more
Half-point raise biggest increase since 2000
The cost of borrowing money to buy a home or a car or to pay for home improvements is going up and fast.
The Federal Reserve’s decision to boost interest rates by a half-point on Wednesday, the biggest increase since 2000, is one of what is expected to be several increases in rates in coming months in an aggressive bid to take on inflation running at its highest rate in 40 years. The Fed previously boosted rates by a quarter point.
On top of raising rates, the Federal Reserve is withdrawing other liquidity from the financial system that has help keep interest rates super low for more a decade.
Both moves figure to boost the cost to borrow or run a balance on a credit card.
“It kind of speaks to the urgency in which he Fed has to act giving inflation is running so high . ... The Fed is going to raise rates a bunch of times,” said Greg Mcbride, Bankrate.com’s chief financial analyst.
The Fed is betting that its moves will slow the economy and cool inflation. The risk is that the Fed will go too far and tip the economy into a recession.
Mcbride said the Fed seems intent on acting aggressively now in the hopes that it won’t have to do as many rate hikes in the future.
So what exactly does the Fed’s actions mean for your money?
Here are some questions and answers about the Fed’s rate hike:
Q: What did the Fed do?
A: The Fed raised interest rates by half of a percentage point to between 0.75% and 1%. It also announced reductions in its ballooning $9 trillion balance sheet. Both moves are expected to lead to higher interest rates that consumers pay on mortgages, existing lines of credit and to finance purchases of vehicles and other consumer debt.
Q: Why is the Fed acting?
A: In short, inflation. The cost of gasoline, groceries and other goods have been rising at the highest levels in more than four decades, eating up the raises that workers have earned over the past year.
Q: What about buying a home?
A. Interest rates on a 30-year fixed mortgage have jumped 2 percentage points since the beginning of the year to above 5%, Mcbride said.
pect of joining the Northland area with plans to create up to 25 full-time jobs offering exceptional employee benefit packages and competitive, above-market living wages,” Jacqueline K. Solomon, president of Cherokee, wrote to the NCC.
“We strive to hire local residents and bring both social and economic benefits to our neighborhoods,” Solomon wrote.
An affiliated company, Solomon Oil Co., purchased the site for $500,000 on March 30, according to the Franklin County Auditor’s Office.
“In addition to job creation, Cherokee plans to invest substantial capital into infrastructure improvements, as well as corporate, real estate and income-tax revenue for the city of Columbus.”
Celebrezze said if applicants demonstrate to the Columbus Board of Zoning Adjustment they have completed code requirements, the BZA must provide a special permit for the operation.
Dave Paul, chairperson of the NCC’S development committee, said it makes sense to open the dispensary at the former Groll’s site.
“We didn’t have any real problems with it,” he said.
gseman@thisweeknews.com