So the Fed is raising rates quickly. What does that mean to you?

Basically, debt just got more expensive and harder to get. If you carry a balance on credit cards, the rate has likely jumped 2% or more. Mortgage rates that were 2.5% just a few months ago are now at 5.7% and new auto loans are now more expensive. Rates will continue to climb.

Why is the Fed raising rates so much so quickly?

The Fed is trying to put the brakes on inflation. To do this, they need to severely curb the money supply. They do this by raising rates and this will slow the economy. The hope is to take the economy to edge of recession without actually creating one. Historically, this has been difficult to do.

Why did the Fed take so long to act?

The fed deemed some inflation to be fine to get the economy jump started coming out of the Covid era. The Fed’s failure to act quickly coupled with the government over stimulating the economy has led to the inflation we see today. The “fix” won’t be easy and will certainly be painful for many.

So what should I do?

Avoid taking on new debt, eliminate consumer debt if you can, and prepare for an economic slowdown