x
Breaking News
More () »

How the federal interest rate hike could impact your wallet | Money Smart

The Federal Reserve increased its benchmark interest rate by half a percentage point, and that means major changes may be coming to your wallet.

PENNSYLVANIA, USA — Recession.

It’s a word on many people’s minds as the Federal Reserve hiked interest rates once again

Dan White, founder of financial firm, Daniel White & Associates, knows this means the possibility for market instability is there.

"They're trying to do kind of gradual rate increases, we're talking seven, to 10, to 12 rate increases and they're trying to engineer what they refer to as a 'soft landing.'"

This increase means many consumers will feel the effects in several main areas.

For those looking to buy houses, White said this may cool off a two-year hot market streak.

"This may cool it off a little because...mortgage rates are going to go up and...I don't know if it's going to get much better. Rates could be higher six months from now, so if you're looking to buy a house, now would be the time."

Meanwhile, total household debt is approaching $16 trillion, marking the largest increase in overall debt since 2007.

So, for those who need to pay things off, White said, "if you have credit card debt or anything that's a variable rate...it gives you incentive to perhaps pay off some of that variable debt."

His advice if some of that debt is too big too diminish completely, "try to refinance it to a fixed rate as quickly as possible."

Right now is a moment, White said, to take stock of your finances as consumers weather the storm of inflation.

Download the FOX43 app here.