The Federal Reserve Bank announced a 75-basis point interest rate hike on Wednesday. The move comes after inflation hit a new, 40-year high last week, with consumer prices reaching an 8.6 percent mantel over where they were a year ago. Even with the rate hike, interest rates will still only be around 1.6%, close to all-time lows. An increase in the Funds rate translates down to higher rates in credit markets, mortgage markets and any industry that relies on financing plans to make payments. This means higher monthly house and car payments and a bigger price tag on outstanding credit card debt. Stock markets are falling and seeing dramatic swings in prices. Price increases that shrink demand also have the effect of forcing companies to cut costs . . .
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