What the Federal Reserve’s Latest Interest Rate Hike Means for your Finances

The latest (July 27th) Federal Reserve hike added another .75 percentage point increase from what we would consider significant, marking it as the fourth rate increase of this year. Many have been left wondering what this means for their money.

Bad news: Mortgage rates have increased. This means people who are looking to buy a home may have trouble with the fact that it is adding additional yearly costs to the home. Also, credit card debt is becoming more expensive since it works hand in hand with the Fed’s rates. Higher APRs mean if you can afford to pay your balance quicker, you may want to do just that.

Good news: Certificates of Deposits (CDs) and Savings Accounts rates’ have risen considerably. This means savers are expected to get a better return on their investments. While the higher rates will help savers, it is still a long way for those returns to compete with these even higher inflation rates.

The market could always be doing better, but you will likely benefit by continuing to save and grow your portfolio.  If you are considering shifting your portfolio during this uneasy period, speak to one of our advisors and we can come up with a new strategy to keep you moving forward on the right path.

* Any opinions are those of the author and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Investing involves risk and you may incur a profit or loss regardless of the strategy selected.