CAPE CORAL, Fla. — The Federal Reserve made another aggressive move on Wednesday to fight inflation. The Fed has raised the interest rate again. This time, three-quarters of a percent. It's the largest hike since 1994.
This comes as gas prices soar, groceries are on the rise and rental prices are climbing
During the previous hike less than two months ago, the interest rate hike did what the Fed intended. Fewer people applied for a mortgage, which was meant to help inventory and level out the market.
With this hike, you'll feel it if you're in the market of buying a new home or car.
"They’re going to see interest rates on homes go up quite a bit, they’re going to see interest rates on cars go up quite a bit," said Adam Bruno, a financial advisor at Evolution Retirement Services. "That means they’re going to spend more money and that’s going to be painful."
Bruno says we've kept the interest rate so low for so long, that it was bound to explode. He believes it should've been raised slowly over time.
On the flip side, a Fort Myers real estate agent said with this increase, we could see rental prices go up even more than what we're already seeing.
"Depending on the financial resources they [investors] might be able to do it, but that also will affect the rental market and where they might want to choose where to offer the rental property at," said Michael McVety, general manager at Red Fortress Property Management.
This means rental prices could go up, though there's an intended outcome to the Fed's move.
"Raising the interest rates is to help us stabilize as an economy," Bruno said. "Recession or not — we’re in some really trying times right now."
Bruno believes it will likely start to level out at the end of the year, but not without more changes.
"We can expect probably about three to four more raises this year at some point," he said.
The financial advisor says there are ways to weather the storm.
- Don't start putting more on your credit cards
- Don't panic and if you don't need to buy it, don't
- Be careful with what you're spending money on
Evolution offers free financial advice. You can contact them at 239-771-8696.
