The Federal Reserve said yesterday it would raise interest rates (fed rate not mortgage rate) by a quarter point to a range of 4.75-5.0%. We are still fighting inflation at over 6% every month since October 2021. The target is around 2%.

There is a strong indication that the Feds will pause as the availability of funds for banks to lend to businesses has tightened. This has the equivalent of a quarter point rise.

Think of it this way, if it’s harder for a business to borrow money to purchase new equipment to expand their business, they may not hire additional employees. This has a ripple effect in the broader economy.

It seems strange to slow down a robust economy with low unemployment and consumers continuing to spend but there is a larger reason. If inflation is not controlled, the money you have today will be worth far less in the future.

We continue to see rate improvement this week. call or email with any questions and have a great Thursday.