With the Federal Reserve continuing to combat inflation, variable interest rates on credit cards are likely to rise.
At its meeting in March 2023, the central bank announced it would increase its target interest rate range to 4.75 percent to 5 percent. After a string of increases beginning in March 2022, when the Fed's target rate was raised from zero percent, we now find ourselves in this position.
The Fed did note, however, that the March failures of Silicon Valley Bank and Signature Bank would likely have a trickle-down effect on the economy, slowing credit availability, employment, and inflation, helping the Fed achieve its goal of cooling the economy.
The Federal Reserve has raised its projection for the appropriate Fed funds rate in 2023 to 5.9 percent (up from 5.6 percent when they last made their projections). That means more rate increases are on the way this year.
This means you may end up paying more in interest than you anticipated if you use your credit card and fail to pay off the balance in full by the due date. Higher interest rates highlight the need for strategic credit card management.
The Consumer Price Index increased 6.0% year over year in February, the lowest annual increase since September 2021, but the Fed is still on high alert. The Federal Reserve will remain vigilant until it is convinced it has slain the beast of inflation, which has reached its highest level in more than 40 years over the past year.
Inflation under Paul Volcker's leadership at the Fed reached 11% in 1980. This experience has taught the Fed that it must act to reduce inflation before it causes widespread anxiety among consumers and businesses.
At its meeting in March 2023, the central bank announced it would increase its target interest rate range to 4.75 percent to 5 percent. After a string of increases beginning in March 2022, when the Fed's target rate was raised from zero percent, we now find ourselves in this position.
The Fed did note, however, that the March failures of Silicon Valley Bank and Signature Bank would likely have a trickle-down effect on the economy, slowing credit availability, employment, and inflation, helping the Fed achieve its goal of cooling the economy.
The Federal Reserve has raised its projection for the appropriate Fed funds rate in 2023 to 5.9 percent (up from 5.6 percent when they last made their projections). That means more rate increases are on the way this year.
This means you may end up paying more in interest than you anticipated if you use your credit card and fail to pay off the balance in full by the due date. Higher interest rates highlight the need for strategic credit card management.
The Consumer Price Index increased 6.0% year over year in February, the lowest annual increase since September 2021, but the Fed is still on high alert. The Federal Reserve will remain vigilant until it is convinced it has slain the beast of inflation, which has reached its highest level in more than 40 years over the past year.
Inflation under Paul Volcker's leadership at the Fed reached 11% in 1980. This experience has taught the Fed that it must act to reduce inflation before it causes widespread anxiety among consumers and businesses.