The Fed is getting very aggressive in its attempts to tamp down inflation, preparing to raise interest rates by half a percent this week. This comes as inflation continues to power along at historic rates. WWL spoke with a UNO Finance Professor about the move, which is expected to come Wednesday.
“They overdid it, they should have started to back off this stimulus back in last… they didn’t stop until March of this year so just two months ago they were still pumping over 100 billion a month into the economy,” said Professor Mark Rosa. “That’s why they have to slam on the breaks disproportionately hard this time.”
Rosa noted the last time a half percent increase was instituted was over two decades ago, and it appears possible we could see another two 50 basis point hikes in the coming months. That would raise the prime rate from 3.5% to 4% and then beyond.
“All of your home equity lines of credit, credit cards especially are going to get hit immediately,” said Rosa who recommended anyone with a non-fixed rate loan or debt to try to emphasize paying that off as quickly as possible.
