How the upcoming Fed meeting about interest rates affects you
In the coming days, you will hear more about the upcoming
Some analysts are predicting a full percentage point raise, or 100 basis points, which would be the largest since 1989.
In June, the Fed raised interest rates by 0.75 percentage points, or 75 basis points: the largest interest rate hike since 1994.
"Part of the issue is that as an inflation control strategy, interest rate hikes are not so great right now," said
Interest rates make it more costly to borrow money, so they affect big purchases like homes, cars, and credit card debt we carry over from month to month.
But, as Bivens points out, they do not do much to change the price of everyday purchases like gas and food, which are affected by other pressures such as the war in
"I would just sort of tell people to discount the last inflation number they heard much more than they usually would because we just know so much of it is obsolete," he said. "So much of the price pressure is oil and food and those prices have gone in a very different direction in the past two to three weeks."
The
In the last month, however, the average price of a gallon of gas has fallen by
Bivens notes the significance: falling prices indicate a shifting trend, which is what he says is an important piece of information to pay attention to.
He says if the
"If you're
Home sales, mortgage demand fall
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