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The Fed raised rates again; does it impact you?

Saadia Ahmed, CFP®

1 min read

Jul 28, 2023



The Fed raised rates yesterday for the 10th time since March 2022. The obvious effect of these aggressive rate increases has been higher short-term borrowing costs like credit card, car loans, and mortgage rates. However, a more significant effect of this decision is further tightening of credit, making it more difficult for individuals and businesses to obtain credit. The Fed's primary objective is to bring down inflation, which can be achieved by reducing cash in the consumer’s pocket through demand destruction. Unfortunately, one of the ways to achieve this is through increasing unemployment. As people have less money, demand for goods and services decreases, and prices go down. Despite the recent round of layoffs, unemployment is still at a record low, which is excellent for the economy, but it poses a challenge for the Fed's goal. The Fed will need to balance its desire to control inflation with the potential negative impacts of its policies on employment and the broader economy.




Saadia Ahmed, CFP®

1 min read

Jul 28, 2023

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