WASHINGTON D.C — Inflation is at a 40-year high and Wednesday the Federal Reserve will decide whether to raise interest rates to levels we haven’t seen since the mid-'90s. The goal is to tame inflation and help level off the economy.
The Reserve is expected to raise its benchmark short-term interest rates three-quarters of a point. Typically it raises rates a quarter of a point.
This means you’re going to pay more on anything you buy through a loan. That includes cars, new homes and renovations, and even purchases you make with credit cards.
So what can we do to protect our money?
Experts say to first not panic because the market is in constant fluctuation and likely will come down eventually.
In the meantime, continue to invest in your 401(k) and retirement accounts.
Next is simple: cut down on non-essential spending.
If you are someone living paycheck to paycheck and don’t have an emergency fund, experts say you should stop going out to eat, going on vacations, or stopping any extra spending in general.
The chart below shows the percentage change from May 2021 to May 2022 for certain consumer goods and services. This chart is current as of June 10, 2022.
Mortgage rates are also soaring again this week, thanks to fears of another rate hike.
The average rate for a 30-year fixed mortgage now stands at 6.28%.
