The Fed Will Keep Interest Rates Low Despite Inflation Concerns
However, inflation looms: As a result of economic growth and business owners raising wages to attract workers, the Fed raised the predicted inflation rate from 1.8% to 2.4%. On the bright side, the Reserve foresaw a stabilization by 2023, bringing inflation down to 2.1% by the end of that year.Out of the eighteen Federal Reserve officials, seven of them penciled in an interest rate increase in 2023, while 11 of them anticipated this policy tool would remain on hold.What does this mean for the average Joe and Jane? The extremely low interest rates provide an opportunity for consumers to save money if they refinance existing debt at these lower rates. However, mortgage rates keep rising, averaging 3.09% for 30-year fixed mortgages - the highest it’s been since June of last year. Still, this is the optimal time to refinance other loans.
Image credit:Wikimedia Commons; author: Dan Smith, under the Creative Commons Attribution-Share Alike 2.5 Generic license.
Albert Einstein is said to have identified compound interest as mankind’s greatest invention. That story’s probably apocryphal, but it conveys a deep truth about the power of fiscal policy to change the world along with our daily lives. Civilization became possible only when Sumerians of the Bronze Age invented money. Today, economic issues influence every aspect of daily life. My job at Fortunly is an opportunity to analyze government policies and banking practices, sharing the results of my research in articles that can help you make better, smarter decisions for yourself and your family.
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