Climbing Interest Rates – Professional Tax Services

The Federal Reserve has continued to raise interest rates in an attempt to curtail inflation. Rising interest rates also diminish burrowing, which in turn decreases the nation’s money supply. This leads to a slower economy and less money in circulation.
When you have a savings account, you are actually allowing your bank to borrow your money. Because their loan volume has decreased, banks need to attract customers to open or increase their savings accounts. Thus, lending institutions are competing with each other to get your money by enticing customers with higher rates for savings. Some rates are now as high as 4.5 percent. This may continue to increase.
On the downside, the result of increases in interest rates by the Federal Reserve is making it challenging for consumers to make purchases of homes and cars. Home prices have dropped in some areas of the country. However, the higher interest rates have caused many homeowners with low interest loans to postpone trading up to larger homes, thus helping to cause a shortage of inventory. Home interest rates are now as high as 6.5 percent, and many with variable mortgage rates are facing an increasing burden to meet their loan obligations.
Supply chain problems are causing auto prices to remain high. To make matters worse, potential buyers are now faced with interest rates that are also hovering around 6.5 percent.
Interest rates on credit cards are usually not fixed. Therefore, credit card interest rates are higher and will continue to increase should the Federal Reserve proceed with more rate hikes. Paying off your credit card debt is a wise decision. If you qualify, we advise you to consider moving your interest debt to a balance transfer credit card as long as some are still available.
If you have questions concerning managing your money in the current economy, we welcome you to contact us.
Professional Tax Services has been proudly selected by Santa Clarita Magazine as Ultimate Tax Service for 2023.
Professional Tax Services is a locally-owned provider serving over 3,500 local residents and businesses. For more information, call 661-259-1967 or visit www.scvprotaxservices.com.