Higher interest rates are starting to ripple through the personal finance landscape, and it doesn’t look like that trend will change anytime soon. If you have a balance on a credit card or an adjustable-rate mortgage, you might notice changes in your payments.
The Federal Reserve’s job is to control inflation. They have indicated their plans to keep raising short-term interest rates to help manage inflation, which is at its highest level in 40 years. You’re likely to see the effects of inflation when buying gas or groceries, and you’ll notice it if you are shopping for a new or used car.
Time will tell whether higher interest rates may prompt you to consider changes to your portfolio. Remember, your overall strategy should take into consideration that there will be transition periods in the economy. Even at the current interest rate levels, they are still much lower than historic levels. In the 1980s, treasury rates were at an all-time high of 15.8% and are now at historic lows around 2.8%. (2020 Advisor Channel, 2022 YCharts)
Despite these facts, your personal finances may still be feeling the effects of inflation. To address this, consider paying down your credit cards and possibly refinancing your mortgage to a fixed rate. Furthermore, reevaluating your spending patterns to see if there are opportunities to adjust may help you to better withstand these inflationary pressures.
If you have any concerns about how inflation may be affecting you and would like some advice on this topic, talk to your financial advisor, or contact us. We welcome the chance to help you and hear your story.
Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.
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