Broker Check

Your Weekly Journal - May 13, 2024

HIGHER RATES ARE DOING WHAT THEY’RE SUPPOSED TO DO

HIGHER RATES ARE DOING WHAT THEY’RE SUPPOSED TO DO

Last week, Federal Reserve officials spoke about keeping the federal funds rate higher until it becomes clear that inflation will reach the Fed’s two percent target rate. 

While people typically don’t mind earning more interest on their saving and investment accounts, higher rates are painful for consumers. That pain is why higher rates help lower inflation. They discourage borrowing and cause people to buy fewer goods. Lower demand for goods and services should lead to lower inflation, reported Trina Paul of CNBC.