How the Interest Rate Hike Might Affect You
In this clip from the AMA, we talk about what an interest rate hike is and how it affects the average person.
I'm sure we've all noticed the cost of everyday things skyrocketing recently.
We can see the effect clearly if we take a look at the current housing market. Mortgages rates have jumped up 2-3 points in the recent months. For home buyers, this makes your mortgage payment higher. With this increase in the cost of the home, the amount of home you can afford becomes less, aka decreasing purchasing power.
The biggest components affected by this interest hike are investment returns, purchasing power, and overall costs of things.
To sum it up: the cost of money is higher. And it will remain like this until the Fed decides to lower rates thus encouraging people to lend again.
We talk about this and more in this clip from the Weekly AMA!
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▶️ 3Speak
Perhaps, one of the things that has happened over the past few years although not as bad as 2008 era, is the increase in giving people loans that don't qualify for them. We were told we could afford much more than we realistically could but they didn't care, they wanted us to buy bigger! Crazy stuff. The interest rates need to stay a little higher for a bit longer I think, to level some things off.
Yeah this is exactly right. Consumer debt has risen to incredibly high levels along with spending on goods. Meanwhile, people have quit their jobs and we’ve seen a massive exodus of workers in the global work force.
It’s pretty ridiculous times. I think we’ll see the FED walk back some of this but they need more pain for now
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That's absolutely correct, in my area there are like 20 buildings came up in like 6 months time and all are on loan only because the loan were cheap
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Wow that’s crazy! We did see some nice booms in those regards. Best strategy now IMO is to accumulate and wait
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Yeah, that's what I am also doing, it's good to keep some cash in hand for the future now.
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Dry powder is the key to building wealth in a recession
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This really have affected so many things that the prices of stuffs keeps increasing without any sign of going down which is really disturbing and affecting the economy
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Yeah we are definitely in a recession. The question now is how long It will last
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With the increase in interest rate, let's hope that the purchasing power of the people will come down and all the commodity prices come down, but the economic condition is becoming worse nowadays.
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Definitely worse. Most people are denying that we’re in a recession but it is obvious that we are. We’ll see ourselves come out of this stronger though - I give it 1-2 years
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For me, it looks like it might take more time to come out from it fully, and a recession and might be a depression which can follow.
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This has some potential. Although, I think the metrics support a quick recession - meaning, not all metrics are bad across the board. Just some
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Everything's been affected. Electric prices has gone up, even stable foods like fruits and dairy products !
Yes! Massive inflation across the board
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Yes, all went up… all cost. Energy, petrol prices, food too.
There need to be a stop soon. As people are getting into problems. Especially some didn’t get back to jobs yet after COVID.
The high interest rates and loans they still give out… it’s coming close to the crash from 2008, why it happened.
Hope it levels and they find better solutions.
Crazy times.
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I agree. It’s going to be looked at in history as another recession in the economy.
These are still the fallouts of covid - I’m hoping we’ll see a massive dip as things equalize and then we come out of this stronger than ever
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Yes, they are indeed the fallouts after COVID.
It needs to dip, and like you say we come out stronger.
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100%. Every market needs to correct eventually
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