When to expect interest rates to rise in 2022

US households braced for rising interest rates this year, affecting everything from mortgages to credit cards.

A meeting in March will determine whether interest rates will rise in the first few months of 2022.

Interest rates may increase for the first time in a year


Interest rates may increase for the first time in a year

This comes out as CME Group FedWatch Tool shows that the probability of a possible rate hike in March in the first week of 2022 increases by 57.6%, reports Fox Business.

The Federal Reserve controls the federal funds rate.

Rates have not been increased since December 2018.

In 2019, interest rates have dropped from 2% to 2.25%.

Then, in 2020 at the start of the pandemic, the government reduced the rate again, saying Covid outlined “developmental risks to economic activity”.

The rate was then cut to zero less than two weeks later.

Now, two years later, the first meeting will be held in March to determine if interest rates will be raised again.

The federal rate could increase as much as four times by 2022, depending on how the March meeting plays out.

FOX business reported that interest rates are expected over the next few years at 0.9% at the end of 2022, 1.6% at the end of 2023, and 2.1% at the end of 2024.

In a statement from December, the Federal Open Market Committee said: “With inflation having exceeded 2% for some time, the committee expects it will be appropriate to maintain this target range until labor market conditions reached a level consistent with the committee’s assessment of maximum employment.”

The rate hike could help slow inflation, which hit 7% by the end of December 2021 – a 39-year high.

What does that mean for me?

For starters, if you’re considering refinancing your mortgage, now is the time before interest rates go up.

You should start the process now before you incur higher interest rates.

You might also consider taking out a loan during times of low interest, if you need to, or even compound your debts.

We explain More on inflation and current rates.

We also explain money transfers you can make before interest rates rise.

How stimulus checks could lead to less value of your money in the future

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