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Fed Approves Largest Interest Rate Hike in Decades To Tame Soaring Inflation - YouTube
Channel: NBC News
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good evening today some tough medicine
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for an american economy wracked by high
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inflation the federal reserve raising a
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key interest rate three quarters of a
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percent it's the biggest bump up since
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1994. a hike sure to be felt in the
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wallets of american borrowers think
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higher mortgage rates and bigger credit
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card payments which we'll get into in
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just a moment what's it all about well
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the fed hopes the increase will start
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putting the brakes on inflation which is
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running at 40-year highs gas food prices
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you name it it's all soaring investors
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like the news today the market's
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rallying on the fed announcement policy
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makers weighing future increases while
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trying to steer around the risk of a
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recession let's tell you what you need
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to know about all this starting with tom
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costello
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for days the fed has telegraphed that it
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would go big today after acknowledging
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it should have acted sooner to rain
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inflation today's three-quarter point
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rate hike is on top of two smaller hikes
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earlier this year we at the fed
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understand the hardship that high
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inflation is causing
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we're strongly committed to bringing
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inflation back down by raising rates and
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the cost of borrowing from mortgages and
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car loans to big business loans the fed
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hopes to cool the economy without
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pushing it into recession inflation now
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running at 8.6 percent the highest since
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1981 and americans are getting squeezed
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to make ends meet louisiana special ed
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teacher and single mom christina seale
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is now selling her plasma to earn an
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extra six hundred dollars a month it's
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something that i have to
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to do in order to keep
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my family
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afloat in order to make sure that
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there is enough food to go around and
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the lights are on and i've got gas in my
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gas tank christina says her monthly
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bills have nearly doubled a tank of gas
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from 40 to 90 dollars a week utility
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bills from one eighty to three hundred
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dollars groceries from 150 to 300 a week
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now she's turning to a local food bank
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for help things
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just kept going up inflation kept going
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up and up until my credit card was
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eventually maxed out cereal
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peanut butter
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at the loaves and fishes food pantry in
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los angeles brenda hakeemian says she no
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longer feels a part of the middle class
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there's either extreme rich or extreme
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poor and the rest of us just kind of
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fall through the cracks meanwhile with
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nearly every american watching more of
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their paychecks sucked into their gas
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tank the national average now 501 a
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gallon president biden today accused u.s
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oil companies of profiting off the pain
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at the pump with oil refining capacity
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down 3 million barrels a day since 2020.
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in a letter to seven oil ceos mr biden
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writes at a time of war refinery profit
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margins well above normal being passed
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directly onto american families are not
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acceptable but the oil industry believes
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the biden white house has been hostile
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as it tries to go green
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six refineries have gone offline many in
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need of overhaul to meet environmental
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standards the oil industry says u.s
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refineries today are running at or near
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capacity to meet demand but still demand
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is outpacing supply and time continuing
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supply chain problems i know are one of
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several factors the fed says is driving
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this inflation
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yeah absolutely and the covert lockdowns
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in china not helping the supply chain
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they're also watching the war in ukraine
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driving up prices and consumer demand
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and they expect they will raise rates
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again in july maybe by another
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three-quarters of a point this will
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continue through the year and
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unemployment likely to rise from
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historic lows to maybe even above four
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percent sometime in 2024 lester all
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right tom costello thank you those
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rising interest rates as you heard will
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likely send mortgage and other rates
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even higher in coming weeks pushing some
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people to buy now for fear of paying
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more later jolene kent reports in our
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series priced out
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i'm so glad that we found these sky
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callahan was in a rush so financially
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overall it's been a little bit of a
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struggle we had to either buy before the
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rates went up or completely wait
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with a growing family she needed a
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bigger house calculating what the new
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jersey family could afford depended on
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interest rates which have surged a
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30-year fixed rate mortgage climbing
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from 3.3 percent at the start of this
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year to 6.22 percent now home prices
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have been soaring too median sale prices
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have skyrocketed 16 percent in the past
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year the combination can mean as much as
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a thousand dollar increase in monthly
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payments for families like the
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callaghans a trend pushing some to act
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in a hurry when we saw that the rates
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were going up due to inflation that's
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when we really
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got into gear and decided to okay we
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need to make a move now because it's
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only going to get worse
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that feeling callahan was getting is
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called inflationary psychology and many
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americans say they've got it too beyond
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the housing market nearly 90 percent of
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americans are concerned about inflation
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and more than a third of shoppers said
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they have purchased something recently
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for fear that the price would continue
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to rise
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it's our rationale that we need to
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stockpile things before the price
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increases it just creates a
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self-fulfilling prophecy as we spend
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more we feel like we have less money we
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blame it on inflation when maybe it's
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actually our psychology inflationary
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psychology can impact the way we spend
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money on everything from houses to
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swimsuits to baby formula triggering
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even more stress and anxiety i feel
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pressured to buy now as opposed to
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waiting a few months because who knows
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what the prices are going to be then if
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you're going after a big ticket item
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that you really need say a house
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should you be approaching this in a
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certain way yeah you know honestly you
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won't see a dramatic drop in prices
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after inflation stabilizes maybe it's
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time to say instead of buying this year
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maybe i can rent somewhere affordable
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and wait till i have more savings to buy
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those big ticket items
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big ticket items
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whose costs seem to just keep going up
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jolene kent nbc news
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[Music]
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of course it's not just soaring home
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prices and mortgage rates so many
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factors are combining into an economic
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picture painful for many americans high
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gas prices are contributing to the 8.6
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inflation rate that shoppers are all too
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familiar with markets are down
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substantially the dow has dropped more
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than 16 percent since the start of the
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year though closing up today as we noted
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earlier meantime household debt is
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rising setting a new record this year at
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nearly 16 trillion dollars and credit
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card debt that's up reaching 841 billion
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dollars with rates expected to go up
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joining me now is cnbc senior personal
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finance correspondent sharon epperson
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sharon what are you telling people they
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can do right now
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lester the first thing to do is don't
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panic panic is not a strategy focus on
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what you can control with your spending
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pay down credit card and other high
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interest debt by some estimates card
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rates will be close to 19 percent by the
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end of the year so you want to try to
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move that debt to a lower rate by
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switching to an interest-free balance
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transfer card to boost savings look at
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your subscriptions one study says
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americans spend about 133 dollars more
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than they think they do on monthly
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subscriptions so you wanna try to cut at
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least one of those expenses as a way to
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save or put that money toward covering
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the rising prices of what you need every
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day like food and gas and when it comes
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to investing stay focused on your
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long-term goals if you have a workplace
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retirement plan a 401k or other type of
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plan you are consistently putting in a
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set amount of money each pay period so
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when markets are down those dollars are
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buying more shares and when markets
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recover
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you've put that money to work toward
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what eventually could be significant
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growth lester a lot to talk about around
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the kitchen table tonight sharon
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epperson good to see you thank you
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good to be here
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