GREENVILLE, N.C. (WITN) – The Federal Reserve hiked its key rate Wednesday three-quarters of a point for a fourth straight time.
Although that number may not seem large it could have a major impact.
“So I plan on going to dental school, so that’s even more student loans for me so, and ya know, it’s sad because, like I said, dental school is already expensive and undergrad is expensive, so I don’t know, we gotta do something better than this,” said ECU Junior Ja’Cory Brunson.
Brunson is an East Carolina University student who is keeping a close eye on interest rates as he plans to go to grad school.
The Federal Reserve has already raised interest rates four times this year — hoisting its Federal Funds Rate from nearly zero to a range of 3.75% to 4%.
Wednesday’s announcement affects many home buyers, student loan holders, credit card debt holders, and so many others.
“Anytime something like this happens, of course, it does affect the market. It does affect buyers and sellers, but we just want to make sure we’re educating all of our buyers and sellers and giving them the best avenues. There are lots of different strategies that we will use in negotiating on the seller side,” said Shannon Hodges, a Greenville realtor.
Although the rate hike could lead to some financial pain for individuals, Nicholas Rupp, an economics professor at ECU, says the rate hike is needed.
“They need to act aggressively to control inflation. It’s a forty-year high right now inflation, so you need to make drastic steps to bring down inflation, and one way they can achieve this is by raising interest rates,” said Rupp.
Experts say that the goal of the interest rate hike is to bring inflation down to two percent.
Another rate hike is expected next month.
Many economists believe that a Federal Funds rate over 5% would almost certainly trigger a recession.
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