Federal Reserve hikes up interest rates

An increase in interest rates came Wednesday. The Federal Reserve raised the target interest-rate from .5 to .75 percent.

The Federal Reserve president believes the U.S. economy is strong enough to add the increase at this time. This is the second rate hike since 2006.

There are costs and benefits to this rate hike; the immediate costs will come to those looking for loans.

“That the cost of loaning money is going to go up. If you’re looking for a mortgage, or if you have credit card rate, or loans out of any type that you’re planning on getting here in the next few months the loan may cost you a little more than you were expecting it to,” said Jennifer Landon, a financial advisor for Journey Financial Services, Inc.

Nevertheless, the country has had record low interest rates for a while and the benefit may lie in savings accounts where you profit from interest rates.

Landon told KIFI/KIDK that these hikes may not be cause for any concern since the economy is doing as well as it is.

“But, like I said, if you are the person who’s looking for a mortgage and looking to refinance some debt, then likely you are going to have a little bit higher rate,” Landon said.

However, keep in mind the interest rate is only increased a quarter of a percent.

“This is a way for them to also monitor inflation. Like I said, there are some benefits and some disadvantages to having a higher interest rate, of course. But one of the big advantages is that it should keep inflation low and controllable as well,” Landon said.

This interest rate increase will also add into the amount the country is paying toward the national debt.