How will the change in the interest rate the Fed has on the lives of ordinary Americans

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The leadership of the US Federal Reserve announced an increase in the interest rate on 0,25 percentage points. Economists believe that one way or another, a change in one of the key macroeconomic parameters will affect all spheres of life. Prices will rise, mortgages will rise in price, loan rates will rise. But what specific consequences should be expected, the experts interviewed by USA Today explained in detail.

In fact, according to financial analysts, in addition to the interest rate, the 2 factor may also affect the situation: the new President Trump intends to cut taxes and allocate $ 1 trillion to infrastructure development. To this is added the rise in oil prices. Obviously, this will cause inflation. So, what changes should be expected.

Mortgage loan activity

At the end of October, the rate on mortgage loans for a period of 30 years increased from 3,47% to 4,13%. This means that borrowers who have taken $ 200 thousand will additionally pay $ 75 monthly. Greg McBright, chief economist at Bankrate.com, is confident that next year we should expect another rate increase, but this is unlikely to be serious.

Car loans

Regular short-term car loans are just more dependent on changes in the interest rate of the Fed. On average, we can expect an increase of 4,25% or an additional $ 3 per month to be paid. Probably, next year we can expect another 3 rate increase, as a result, this will mean for car owners an extra $ 12 to pay.

Revolving loans

Credit cards are most affected by the Fed rate. Changes can be felt in the coming weeks. With the current average revolving credit rate of 16,25%, we can expect an increase to 16,5%.

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