SAN ANTONIO – The Fed did it again.
On Wednesday afternoon, the Federal Reserve announced it was raising interest rates by half a point.
Beginning Thursday, rates will be between 4.25% and 4.5% — the highest in 15 years.
“I’m very concerned about it. Putting food on the table, it’s getting more and more difficult,” said Gus Loeffelholz.
When interest rates rise, buying a home or vehicle, taking out a loan or using credit cards is more expensive.
The hike aims to slow inflation but won’t delay the burn for consumers. Inflation has made everything cost more, and the additional interest rate increase will hit consumers again.
“Goods can get more expensive over time, too. The cost of borrowing goes up for small businesses. So they may have to offset the costs by raising their prices as well,” said Ryan Bailey, senior vice president of USAA.
Bailey said consumers have options if they’re looking to buy a home or pay down credit card debt.
“You want to try to get your highest interest rate debt down further ... Also, homeownership, some of that interest is tax-deductible,” he said.
Bailey also advises consumers to read contracts carefully before taking on more debt.
“Look at the interest rate you’re paying and also look at the fine print on some of the terms and conditions,” Bailey said. “Make sure there’s no hidden fees, but clear higher interest rate debt first, so you can burn that down over time.”
On Wednesday, the Federal Reserve also indicated interest rates may continue to rise over 2023. A possible reduction may not happen until 2024.