Interest Rates May Be On The Rise📈 Again. Here's What To Do.

📆This Week’s Topic

This week, we’ll be talking about interest rates. Officials from the Federal Reserve predict that interest rates will rise again before the end of the year, as a means to combat the inflation rates, which is sitting at 3.7%, a tenth of a point higher than expected due to energy costs, and up from 3.4% during July and August. There is no precise time for the raise, only that it would likely come due to the higher prices caused by inflation, and a stable job market.

💳 The Issue

There is an open mind within the Federal Reserve as to risks and benefits of an increase in interest rates, but the market is betting that they will raise the rates at the meeting on October 27-28. But officials say that there is no need to rush, as short term inflation data is promising, with a slight drop in inflation expected at the end of the year. This is important because consumers get affected by these rates because of variable-rate mortgages. Those are mortgages that change interest rates based on the current interest rate and if you have a variable rate loan, that means you interest on your house might increase. But how else could a potential rise in interest rates affect you as a consumer, and what might happen if they don’t rise, and inflation does?

📊 How Does This Affect My Wallet?

The higher interest rates will primarily make borrowing and financing more expensive. So, things such as mortgages on properties or vehicles will rise, which could hurt the housing market or the automobile sector of the economy. And financing things such as credit cards, loans, or large purchases will be more difficult, as the cost over time will rise. This is restrictive of the purchasing power consumers will have and could affect the economy greatly. But interest rates will only slow down consumers, which hopefully will gradually cause prices to lower, giving consumers cheaper costs and more purchasing power. Here are a couple things to consider:

🔚 Outcome

A benefit of a potential rate rise would be that people with savings accounts or money markets would see a rise in the returns they get from the total sums in their accounts. But on the other hand, the house market will likely stagnate with the rate hike, due to increased mortgage costs. People will be less likely to buy properties with high rates, and if payments on owned properties will rise. Continuous payments on large purchases could rise with inflation rates, which could force consumers to skip buying non-essential products or services, so a rise in rates could force the hand of consumers on a daily basis.

⏳ Final Summary

In total, the Fed is considering raising interest rates, but there are mixed opinions whether to do it sooner or later, as predictions for the inflation at the end of the year are looking up. However, the interest rates could have a variety of both good and bad effects on consumers, so it’ll be a waiting game to see if and when the Fed raises rates, by how much, and the aftermath of the raise. The Fed wants around a 2% inflation rate this year, but it was 3.4% as of July 2026. The Fed has to make sure this goal gets met and since we already over it is the Fed’s responsibility to do that.

🙏Thank You & Important Information

As always, we thank you for reading this week’s edition of Friday Finance. If you liked this article and want to stay updated on finance-related news, consider subscribing. Every other week, we post a little teaser of what the article will be. To check it the account go to: instagram.com/fridayfinancedc or scan the QR code below. Have a great rest of your week and see you in two weeks on November 6!

Best,

Grayson Stein and Jacob Gans

Friday Finance