Reaction to Federal Reserve raising interest rates
WILMINGTON, NC (WWAY) — People in the Cape Fear are reacting to the Federal Reserve’s interest rate hike announcement, as it attempts to combat inflation and help the country’s economy recover.
“Well I think slowly coming to terms with it, and maneuvering what’s going to be our new favorites, and what can you let go, and what do you want deal with, because it is what it is,” said Ingrid Reynolds, Oak Island Resident.
“I think the Fed has to raise interest rates at this point, in order to get a grip on inflation,” said George Whitley, tourist.
Department Chair of Economic and Finance at UNCW Adam Jones says the economy is experiencing a slight recession, but not as severe as the one in 2008.
He explained how the increased interest rates are expected to benefit the economy and average consumer in the long run.
“If you think about it this way, when you’re driving down the road in your car, and you’re just at a nice even keel pace, you’re not really accelerating, you’re not really slowing down, that’s a neutral spot to be. Well the problem with the economy is, it’s gotten going a little too fast recently. Which we see with shortages of workers, we see with inflation, and prices going up. So the federal reserve has to tap the brakes a little bit, and the way they do that is increased interest rates,” said Adam Jones, Department Chair of Economy and Finance at UNCW.
Jones shared what we can expect to see from the Federal Reserve regarding interest rates in the coming months, and the U.S. Bureau of Economic Analysis as it plans to release its estimate of second-quarter GDP on Thursday.
“They’ll continue to raise them over the rest of the year, but at a slower pace, so in smaller increases. The GDP release that’s coming out, that will get everybody’s attention, is this the second quarter in a row of shrinking output growth, your guess is as good as mine, but there’s a reasonable likelihood it could be another negative number showing the economy has flattened out, if not contracted slightly,” said Jones.
Jones is encouraging people to use this time to analyze your bills and debt, to get finances in order to adapt to the increased interest rates. He also advised against borrowing money and relying on credit cards.
