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The Federal Reserve has taken all its steps to curb skyrocketing inflation, announcing that it will raise interest rates by 0.75%, the largest increase since 1994.
An increase in the interest rate will increase the reference rate, or the rate at which banks pay each other for lending money, to 1.5% and 1.75%.
The Federal Reserve last had interest rates of 1.5% and 1.75% for the COVID-19 pandemic in October 2019.
During the COVID-19 pandemic, interest rates were low as the economy recovered from global closure.
Dele Oden, a senior borrower at Coulee Bank, said rate increases would affect Americans who use credit cards to hold certain types of loans, such as those who apply for a line of credit at home.
“So far it’s been 3.25%, so you add that 0.75, that would be 4.125% in advance. That would increase the level of payments on the equity line, which would be interesting.”
The impact on the market is translated from the part of the loan that affects it, which means that people want a second loan, divert shares home to make some home improvements, and so on, ”Oden said.
However, Oden said that despite the growing interest, the time was right to buy a house.
“If you can pay to buy a house and you can find it, buy it. As I said before, it’s a long-term investment. Prices always go up.
That house can go up and down. Your interest will go down, but in the end, it will cost more.
“If you have paid and you have more capital if you sell it, whether it is your conscious home or you will end it all. Everything at home before you retire,” Oden said.
The Federal Reserve is expected to raise interest rates again to around 3.5% by the end of this year.
The Federal Reserve said it was trying to cut inflation back to 2%, which the Federal Reserve said could take another three years.
Reference Source: KIMT
