By Christyn Allen
ERIE, Pa. (Erie News Now) – The effort to slow down inflation and rising prices continues. The Federal Reserve has raised interest rates by 0.5%. It’s the biggest increase in 22 years.
“High inflation really hurts everybody. Especially, everyone on the lower end of the income scale,” ErieBank president, Dave Zimmer, told Erie News Now.
It’s an aggressive move from the Federal Reserve, as Americans battle all-time high inflation rates.
“The Federal Reserve, their main job is to control inflation. They want inflation to be about 2%, and inflation has been running in excess of 8%” said Zimmer.
This hike comes as the housing crisis in our region continues. “You’ve got to move fast,” said Fred Amendola, a Keller Williams real estate agent.
Amendola says the housing market locally has stayed red hot for the last two years. “For your move in ready, HGTV type home, it’s still a frenzy because there’s not enough of them,” he said.
This interest rate hike will likely drive some potential buyers away from the market, but it will take some time for the housing demand to level off. “I think it will slow a little bit, but I don’t see an immediate change. It’s going in a direction it will even out the market.”
“You want to reduce demand, but you don’t want the economy to go into a recession,” said Zimmer
He says it’s a slippery slope for the federal reserve. If you’re planning on making a big purchase, like buying a home or a car, be prepared to see your monthly payments sit slightly higher
“What that means for everybody is you’re going to see interest rates adjust upwards on the mortgage side and on the auto loan side. Rates will probably continue to go up,” said Zimmer.