What to expect with the next interest rate hike.

The Federal Reserve has been fighting to keep inflation at bay with a series of interest hikes and, on Wednesday, they announced the expected fourth “jumbo” 0.75 percentage point hike. 

While the fourth interest hike might slow inflation in some areas, other costs might become increasingly expensive.

Some things that could get more expensive:

  • Credit card interest rates – The annual percentage rate (APR) is likely to climb as high as 19%. It was 16% at the beginning of the year.

  • Auto financing and mortgages are likely to climb to to 6% and over 7%, respectively.

  • Home equity loans and lines of credit could reach as high as 8%.

The Fed hopes that the interest rates will slow down buyers and make borrowing less appealing.

However, despite the ongoing series of interest rate hikes, many economists believe that a recession is a strong possibility in 2023. A recent Bloomberg survey of 42 economists indicated that the probability of a recession happening in the next 12 months is now 60%, versus 50% last month.

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