Ugh, interest rates. They're not the worst ever, but they still hurt, especially with inflation already draining our wallets. The big question everyone’s been asking for months: when will they drop? We might finally see some action soon.
Here are Five Fast Facts on possible interest rate changes:
- ⏳ Where It Began - Two years ago, the Fed started hiking rates to fight inflation, which hit a crazy 9.1%. Now it's down to just over 3%, but they’re aiming for 2%. They’ve kept rates steady since last summer, and yeah, it feels like forever—because it kind of is.
- 😣 False Starts - The Fed has said repeatedly that they intend to bring rates down as soon as inflation is closer to that long term target. It just hasn’t happened yet. Once again, they kept rates as-is in the July meeting. Status quo? How about status no!
- 💡 Suggestions - The good news is that Fed Chair Jerome Powell said after the July meeting that they’re strongly considering a cut in September if things keep going the way they are, confirming expectations from investors and speculators. Again. But pay no attention to that.
- 💰 Extra Cash? - So what do you do with this info? No change right now, but maybe something in the coming months. If you’ve got extra cash, it’s a great time to invest it! Grab those high interest rates on savings accounts or CDs while you can because they may be going down soon. Wait…who has extra cash laying around right now?!
- 😥 Borrowing Soon? - If you need to borrow, it’s unfortunately not great. If you can’t wait, then at least shop around. You can likely find at least some discounts or better deals if you’re willing to do the research and comparisons. Freddie Mac estimates that getting four mortgage estimates should allow you to save $1200 per year in interest! Ooh, then you might have some extra cash laying around to invest…
🔥Bottom line: It’s still just a suggestion right now. But hopefully unemployment and inflation will behave so the Fed will finally pull the trigger on lower rates. While there’s still a long way left to go, any help would be appreciated by normal folks making payments on stuff.
What do you think will happen with interest rates?
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