Jerome Powell directly addressed the American people yesterday which was rather unusual. His opening remark: “Inflation is much too high, and we understand the hardship it is causing”. That was a good and honest opening statement. I was happy when Biden re-nominated Powell to continue as Fed Chair.
The big move in the Fed’s attempt to stem inflation was an increase in the Federal Funds rate by .5%, with more rate hikes to follow. Where this trickles down into the lives of us simple folk is the money our savings earns on the plus side, and interest rate we pay on our loans- future loans, and current loans with variable interest rates on the down side.
The most common variable interest rate debt are credit cards, home-equity loans, and ARMs (adjustable rate mortgages). Some private student loans also carry variable interest, as well as few other oddities.
Being aware of the interest rates on your debt is obviously a good idea, and if you don’t know, best to find out as there are some steps that can help. If carrying credit card balances for example, make sure the issuers with the highest rates are paid off first.
Happy Thursday !
