The higher prices we’re all paying for just about everything is the reason why we’re seeing The Federal Reserve hike interest rates, making it more expensive for consumers to borrow money.
Sky high prices at the grocery store have been hitting 67-year-old Augustine Agukpe especially hard. He’s a retired health practitioner who reached out to the Houston Food Bank to offset the soaring costs associated with putting food on the table for his family. “Most items in the store, they have all gone up,” Agukpe said.
By hiking interest rates and making it more expensive for consumers to borrow money, the idea is they would start to spend less.
Demand would then begin to wane and inflation, in theory, would start to ease off.
“We might expect prices to stabilize moving forward, not necessarily that the prices will go down but that the rate at which it’s increasing will slow down, maybe in the coming months or coming years,” said Fellow in Public Finance at Rice University’s Baker Institute For Public Policy Jorge Barro.
Barro said we will likely see the federal reserve raise interest rates a few more times in the coming months to battle inflation
According to Bankrate.com, in Dec. of 2021, on a $25,000 car loan over 60 months, when interest rates were at 3.85%, consumers were paying $459 a month on their car note.
Today, with interest rates at 4.86%, that monthly payment has jumped to $470 a month.
