Southwest Florida to feel the sting of 2022’s sixth interest rate hike

Reporter: Asha Patel Writer: Joey Pellegrino
A shopping cart is pushed down an aisle at Target. Credit: WINK News

The Federal Reserve raised interest rates for the sixth time this year, citing inflation. With rates rising, Southwest Florida will see impacts on mortgage rates, credit card rates and even gas.

Gas prices went up nearly 20 cents in the two days after the gas tax “holiday” ended. With interest rates going up, you’re going to see prices for just about everything rise, especially when it comes to essentials like food and electricity.

Federal Reserve Chairman Jerome Powell says rates must go up to bring inflation and prices down. This is the 6th increase in 2022, going up from 3.75% to 4%. Powell says it’s an attempt to cool off the economy, which is still near the highest it’s been in 40 years.
Mortgage rates doubled during the past year and now sit at a 20-year high, which is causing home prices to fall.

“It will become appropriate to slow the pace of increases as we approach the level of interest rates that will be sufficiently restrictive to bring inflation down to our 2% goal,” Powell said. “There is significant uncertainty around that level of interest rates. Even so, we still have some ways to go, and incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected.”

The average interest rate for a used car is around 9.2%, which means fewer people are visiting car lots, thus helping to build more supply.

“Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy,” Powell said. “Without price stability, the economy does not work for anyone.”

One woman from Fort Myerssays these price increases on essentials are hitting her family hard.

“I live with some of my kids… they work, too, but it’s still a week worth of groceries not going anywhere,” said Yolanda. “We’re all adults, so it’s not… you imagine, you have kids… I have sometimes grandkids come over and they stay over two, three nights, and it’s hard on my budget, on our budget, to do that.”

The Federal Reserve’s next decision on interest rates will come next month, and economists are predicting that rates will go up once again.

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