The Federal Reserve is expected to announce a half a point interest rate increase on Wednesday afternoon, which will send mortgage and credit card rates higher, and increase the cost of getting a home equity loan.
According to Rutgers University economist James Hughes, with inflation continuing to surge, the Fed doesn’t really have a choice.
How rising interest rates puts the brakes on inflation
He said the idea here is fairly simple.
“By raising the cost of something you lower demand, and when you lower demand price increases start stabilizing.”