More people taking on credit amid inflation
Interests Rate Increased for 3rd Time
PEORIA (25 News Now) - Every day people are still feeling the crunch as the stocks tumbled again Wednesday, this follows the announcement of another rate hike by the Federal Reserve.
For the third time in a row, the Federal Reserve increased the interest rate which sent stocks tumbling Wednesday.
Wall Street’s S&P 500 index dropped 1.7%.
The lowest in two months.
This happened after the Reserve increased its lending rate to .75% percentage points.
Three times its margin.
Inflation is now at 8.3% year to year.
Economist Joshua Lewer, the Department Chair of Economics and Finance, Bradley University says this is going to have a trickle-down effect on consumers.
Saying people are trying to adapt by taking on more credit,
“Unfortunately inflation is the thief in the night. It’s an invisible tax, and inflation’s burden falls the hardest on those who cannot afford to pay it. Consumer household debt is up and that means that people are already kind of at their budget limit and then they are-and with the food and energy prices going up they end up going into deeper debt,” explains Lewer
U.S. Senator Dick Durbin says even though we are moving in the right direction, he says he hopes the economy expands and doesn’t hit a recession, “I can tell you what we did with our inflation reduction bill. Not only decreased the cost of prescription cost of drugs for families but reduce energy costs as well and in the process reduce the deficit that I think it a good combination of inflationary times.”
On Wednesday, congress held a hearing with some of the nation’s biggest banks.
Representatives from JP Morgan Chase, Citigroup and more say with the pandemic behind us the economy should be the next big focus to ease consumer debt.
Bank of America’s CEO says the amount of money in their client’s accounts has been stable
Showing people are budgeting and trying to combat the increased prices with everyday spending.
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