Is The Fed Still Raising Interest Rates?

Share This Post

Interest Rates: Are They Still Rising?

Interest rates are currently at the highest they have been in 16 years, which is making borrowing very difficult, especially for the average American. With plenty of talks about a recession still going on, it is easy to wonder whether or not the Fed will keep raising rates. Keep reading to learn more about the rising interest rates, how they can affect your retirement, and how to protect your retirement by investing in gold.

Why Are Interest Rates Rising?

The Fed raises interest rates to combat inflation. When interest rates are high, it discourages people from borrowing money. It discourages people because the money borrowed will become more expensive, so they decide to hold off until rates are lowered. This leads to fewer goods sold and less demand. Combined, these slow down the economy so that the American dollar can stabilize. The hope is that more people will save their money rather than spend it on expensive goods. The demand for goods will, in turn, settle, and the economy will stabilize again.

How Much Have Interest Rates Risen?

The Fed has raised the interest rates several times in recent months. This makes making major purchases, such as a car or home, much more expensive than it normally would be. The rise in interest rates affects the economy in many ways.

Some facts surrounding the rising interest rates include:

  • The US central bank has raised interest rates to the highest level in 16 years as it battles to stabilize prices.
  • The Federal Reserve increased its key interest rate by 0.25 percentage points – its 10th hike in 14 months.
  • That pushed its benchmark rate to between 5% and 5.25%, up from near zero in March 2022, although the Fed hinted the rise may be it’s last one for now.
  • The European Central Bank has also raised rates again, although by a smaller amount than in previous months.
  • The ECB lifted its three key interest rates by 0.25 percentage points, whereas the three preceding meetings have all seen a larger rise.

How Do Rising Interest Rates Affect My Retirement?

Interest rates are rising now, so you may be wondering, how does that affect my retirement down the line? According to Investopedia, if you own mutual funds that invest in bonds inside your 401(k) plan, a rise in interest rates will likely lower their share price and net asset value. On the other hand, the income of these funds would likely rise over time as they add new holdings paying higher rates to their portfolios.

In addition, bond prices tend to decline as rates rise and rise when rates fall, while the effect on stocks will depend on the economic environment prompting the change in interest rates. When interest rates begin to move higher, the time might be right to move some money to short-term bond funds or cash.

The rise in inflation of today’s prices and the rising interest rates may cause you to spend more money than you normally would rather than invest it or save it. This causes you not to have saved as much as you would have planned for and the inability to hit your savings goals. As such, during this rise in interest rates, it is important to hold off on major purchases and focus on paying down your debt and building your savings account.

How Can I Combat Inflation?

One of the best ways you can combat inflation during these tough economic times is by investing in gold. The value of gold rises as the value of the dollar weakens. Since the value of the dollar is currently weak, gold is very valuable. This gives your savings, retirement, and your future some padding and a hedge against inflation.

Gold is a great investment during tough economic times for many reasons, including the fact that it is extremely liquid. If you are facing financial issues during this period of high inflation and high-interest rates, you can sell some of your gold for quick cash. This is much more difficult to do with other investments, such as real estate, mutual funds, or bonds—all of which will decrease in value during these tough economic times.

Investing in Gold with Priority Gold

If you are ready to invest in gold to protect your savings and secure your future, we can help. Priority Gold is one of the most trusted precious metals dealers in the United States, with a BBB A+ Rating, AAA Rating with Business Consumer Alliance, and 5 Stars Rating with TrustLink.

We specialize in providing precious metals investment services with Security, Liability, and Great Convenience for customers. Our team is committed to helping to streamline their precious metals purchases at a fair price, selecting the right precious metals portfolios, and meeting their important financial objectives.

We offer Free Storage for qualifying Gold & Silver IRA accounts, a fast & easy gold buying process, and smooth IRA Transfer. And gold shows up on schedule. Priority Gold guarantees the highest customer service standards, which come with honesty, professional conduct, and an Ethical Code of Business.

For more information, visit us at prioritygold.com

More To Explore

Part VII of the 2024 Gold Forecast Series

The Experts on Gold Gold has always been a source of economic stability and peace of mind for investors. In 2024, these experts agree that gold could have a breakout

Part VI of the 2024 Gold Forecast Series

The Election of 2024 A Country Divided According to an August 2023 Gallup Poll, political polarization in the United States has increased dramatically, particularly on issues relating to federal power,

PART V of the 2024 Gold Forecast Series

The Volatility Watchlist Household Debt U.S. households are enduring economic headaches on multiple fronts including high inflation, soaring mortgage rates,  rising gas prices, and evaporating pandemic savings. According to data released