What has been happening recently?
Everyone is saying… “Inflation”, “Rising Interest Rates”, “Higher cost of living”. So what exactly cost that? And why is our interest rate increasing?
The Fed?
Who is that? You may ask.
Fed – Federal Reserve, in short, Fed.
The mission of the Federal Reserve System is to foster the stability, integrity, and efficiency of the nation’s monetary, financial, and payment systems so as to promote optimal macroeconomic performance. Basically, they have to find the right balance – just right, not too hot nor too cold of the U.S economy.
When the economy booms and “runs hot,” distortions like inflation and asset bubbles can get out of hand, threatening economic stability. That’s when the Fed steps in and raises interest rates, which helps cool down the economy and keep growth on track.
So how are rising interest rates affecting you?
In any aspect of finance, you are subjected to the Fed’s fund rate one way or another....