WEST PALM BEACH, Fla. — The Federal Reserve on Wednesday raised its benchmark interest rate by a hefty three-quarters of a point for a second straight time in its most aggressive drive in three decades to tame high inflation.
The Fed's move will raise its key rate, which affects many consumer and business loans, to a range of 2.25% to 2.5%, its highest level since 2018.
The Fed's move will raise its key rate, which affects many consumer and business loans, to its highest level since 2018.
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As interest rates keep rising and recession fears grow, financial experts warn it's time to change habits when it comes to money.
"Your biggest exposure to these rates are variable debts credit cards, home equity lines of credit and any variable rate student loans," Greg McBride, Bankrate.com chief financial analyst, said. "Carrying debt is going to be costlier, you'll be better off if you can work to pay down that debt and boost savings right now."
As for a recession, McBride said we're not there yet, but it may possibly happen by next year.
"Unemployment will go up and that's painful for millions that will lose their livelihoods and experience a period of joblessness," McBride said.
With or without a recession, many in South Florida struggle with inflation, affecting the prices on gas, housing and groceries.
"The cost of living in Palm Beach County has certainly risen dramatically on the back of higher home prices and higher rents," McBride said.
In meantime, he advises consumers to continue investing despite these turbulent times on Wall Street.
“Pay down debt, boost your savings and keep on keeping on with those retirement contributions," McBride said. "It's going to be a choppy year in financial markets. As much as we've seen in the first half of the year, it's going to continue for the rest of the year, but when you look back five, 10, 15 years from now you'll be glad you invested in 2022."
Portions of this article courtesy of the Associated Press
