Local financial analysts respond to national interest rate hike
Rates will rise for the first time since 2018
CHATTANOOGA (WDEF) — America’s central bank will be raising national interest rates by 0.25%.
It’s the first time the Fed has raised the rate since late 2018.
Financial professional John Vandergriff says this is all being done to help offset inflated costs.
“The reason they’re raising interest rates is so that it can help slow the economy down,” Vandergriff said. “The hope is that by slowing it down, they can create a happy medium where it slows enough to keep inflation at a number that their target is about 2%, but doesn’t slow it down so much that it takes us into a recession.”
Inflation has impacted countless Tennesseans and Americans throughout early 2022.
However, raising interest rates is something financial analyst Chris Hopkins says has worked against inflation in the past.
“The way that raising interest rates works against inflation is it tends to cool off the economy a bit,” Hopkins said. “So, it traditionally has worked very well. It’s a very effective tool the Fed has.”
As for what Chattanoogans can expect out of this, Hopkins said that residents should try to pay off what debt they can before rates rise.
He also suggested refinancing one’s mortgage or applying for a loan while rates are “still historically low.”
“Mortgage rates are going to rise slightly, interest rates on new car loans are going to go up slightly,” Hopkins said. “If you happen to carry a balance on your credit cards, those rates are already quite high but they’re going to go up again as a result of this general interest rate rise.”