Money Talks July 2022 | Manuel Jesse Nieto Jr.

Ay, Here We Grow Again

Oops, they did it again!

On Wednesday, the Federal Reserve raised the interest rate by three-quarters of a point. This is the second straight time in a strategic effort to help control the high inflation.

According to the AP, this move raises the key rate, which affects many consumer and business loans, to a range of 2.25% to 2.5% – its highest level since 2018.

Why now?

Inflation has jumped to 9.1% – the fastest growth in 41 years – when most of our parents were little chic@s! The goal is to keep inflation at 2%. That’s a big difference! ¡Ay! No wonder why everything is so expensive these days.

By raising the interest rate, it will cost consumers and businesses more money to take out a mortgage or a car/business loan. The thought behind this is that if people have to spend more money on loans, they won’t have as much to spend on other things (like food, supplies, etc.) – which would then lower costs since demand is down.

But with the downfall there’s no guarantee – and if people stop spending, the chisme is that it could lead us into a recession. This could cause businesses to shut down and people to lose their jobs.

So, what can I do?

Continue to save, save, save! You can count on your amig@s at SUMA to help. We’ve created these easy-to-follow tips to help get you through these unpredictable economic times. Remember, as long as you plan and prepare, you’ll be able to ride through any storm.