For the first time in three years, the Fed has announced that interest rates are going up.
In fact, this is more than likely just the beginning.
Rates are going up by 25-basis points, putting the benchmark at 0.25 and .5 percent.
Inflation is running out of control right now, outpacing wage hikes significantly.
In an effort to slow down spending, the Fed has announced what is the first of what will probably be many interest rate hikes.
According to financial experts, there could be as many as six more interest hikes in an effort to slow down spending.
The idea behind an interest hike is that consumers will be less likely to spend and/or borrow as interest rates start to climb.
In announcing the rate hike, the Fed stated, “With appropriate firming in the stance of monetary policy, the committee expects inflation to return to its 2 percent objective and the labor market to remain strong.”
Fed Chair Jerome Powell added, “The probability of a recession in the next year is not particularly elevated.
“All signs that are this is a strong economy, and one that will be able to flourish in the face of less accommodative monetary policy.”
Last week, the Labor Department announced that the consumer price index had risen 7.9 percent, which was the largest increase in four decades.
Source: Fox Business