LEE COUNTY, Fla. — The price you pay for housing, cars, and other personal loans is about to increase. For the first time in 22 years, the Federal Reserve has raised the interest rates by half a percentage point.
It may not seem like a big jump, but one southwest Florida financial adviser says it actually means you'll be spending more on big purchases.
"It's going to hurt for a little while," said Adam Bruno, owner of Evolution Retirement Services.
With the interest rate hike, Bruno says you'll see your minimum credit card payment rising, mortgages going up as well as auto loans.
Eventually, inflation will not be as bad. The theory is people will buy less because there are already not enough things, like homes and cars to buy.
"I think it’s a combination of not having enough inventory and interest rates going up and people saying you know what, forget it. I’m going to stay where I am or stick to what I have," Bruno explained.
If you have a 401k invested in bonds, Bruno said to think about that investment. As interest rates rise, bond prices fall.
Cooling down inflation will not happen in a matter of months, Bruno says.
"We should start to see inflation as a whole bottom out towards the end of the year and kinda balance itself and hopefully we’ll get back on track," he said.
At one point, Bruno says our inflation rate was at 1-percent. Now, we're at 8.5. He doesn't see it getting back to 1-percent but does see it getting to a comfortable spot.
"I think what’s going to happen is as the spending starts to balance out, as the interest rates start to level off, we’ll finally have some harmony," Bruno said.
