How the Fed raising interest rates could affect you personally with investing, debt, home buying, and saving cash. 

1. For investors

The stock market in 2022 hasn’t been kind to us. As interest rates rise, people are going to spend less money on discretionary items.

Whenever you see this major volatility in the stock market, it’s not retail investors like you and me. It’s the large hedge funds that hold billions of dollars in stocks.

When Fed raises interest rates, it’s going to make borrowing money more expensive for businesses. As demand slows, that means more businesses could have lower revenues.

2. For people in debt

Raising interest rates means raising the cost of borrowing student loans, personal loans, mortgage loans, car loans, or any other fixed loans.

If you’re applying for a loan with a fixed interest rate then you’re most likely going to borrow at a higher rate like mortgage rates right now at 6%.

But if you already secured a loan then your interest and principal payments will remain the same no matter what the Federal Reserve does.

3. For home buyers

With the Federal Reserve raising interest rates, your mortgage rates will most likely go up. Home buyers in 2022 will have to pay much more than in 2021.

Right now, a 30-year fixed mortgage rate is at 6.3% and it’s most likely going to 7 or even 8% if the Fed becomes even more hawkish.

Friends, we can't explain everything about this topic here due to the web stories word limit. So we made a dedicated article on this topic, which you can check by clicking below.