Another interest rate hike likely this month, Fed minutes show

Minutes from the Fed’s June meeting showed that another 75 basis point rate hike could be on the table. (iStock)

The Federal Reserve released minutes from its June meeting this week, showing that another 75 basis point rate hike could be on the table at its next Federal Open Market Committee (FOMC) meeting later. this month.

Federal Reserve minutes show what FOMC members talked about at their June meeting, revealing that they are ready for another big rate hike at the July meeting.

“Many participants felt that a significant risk the committee now faced was that high inflation could take hold if the public began to question the committee’s resolution,” the minutes read. “They recognized the possibility that an even more restrictive stance may be appropriate should elevated inflationary pressures persist.”

In June, the Fed raised rates by 75 basis points, the biggest increase since 1994. The increase was the third interest rate hike in 2022 and pushed the federal funds target range up 1.5%. at 1.75%.

If you want to take advantage of interest rates before they rise further, consider taking out a personal loan now to pay off high-interest debt. Visit Credible to find your personalized interest rate without affecting your credit score.

FEDERAL RESERVE RAISES INTEREST RATES BY BIGGEST INCREASE SINCE 1994

Inflation remains at a 40-year high

Inflation is currently at its highest level in 40 years and shows no signs of slowing down. The consumer price index (CPI), a measure of inflation, rose 8.6% annually in May, according to the latest report from the Bureau of Labor Statistics (BLS). This comes after inflation eased slightly in April, falling to 8.3% a year. On a monthly basis, inflation increased by 1% from April to May.

At a press conference after the June meeting, Federal Reserve Chairman Jerome Powell said another 75 or 50 basis point increase would likely be warranted as inflation continues to rise.

And the Federal Reserve system is expected to continue raising rates after its July meeting because of those inflation expectations, experts say. There could be several rate hikes to come in the coming year and in 2023.

“The FOMC followed with the largest rate hike since 1994, and the median member of the committee expects another 175 basis points of hikes before the end of the year,” said Curt Long, chief economist and vice president of the National Association of Federally Insured Credit Unions (NAFCU). of research, said after the last Fed meeting. “That’s a significant departure from the committee’s forecast three months ago, and the rest of the economic projections confirm that.”

If you’re struggling with current inflation, consider refinancing your private student loans — before rates rise further — to lower your monthly payments. Visit Credible to compare multiple student lenders at once and choose the one with the best interest rate for you.

INFLATION REACHES NEW 40-YEAR HIGH IN MAY WITH NO SIGN OF SLOWING DOWN

What this means for your wallet

Interest rates for many types of credit will be affected by Fed actions since interest rates follow the direction of the fed funds rate.

When the central bank begins to raise rates, borrowers with credit cards and adjustable rates or other short-term interest rates that change with market conditions will be the first to be affected. Other interest rates will also be affected, including homeowners with adjustable rate mortgages (ARMs).

If you have an ARM or another form of credit whose interest rates may rise in the coming months, refinancing could help you keep your rate low. Compare interest rates from multiple lenders and get the best rate for you.

Contact Credible to speak with a home loan expert and get all your questions answered.

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