CANFIELD, Ohio (WKBN) — There’s still a lot of uncertainty about finances heading into the New Year as inflation continues to balloon. Federal interest rates have risen at historic rates in 2022 — driving up the cost of many goods and services.
The federal reserve raised the federal funds rate seven times this year. It currently sits at 4.4%. The last time interest rates were raised this many times was in 2005 during the housing market boom.
The hikes are supposed to stop inflation, but prices for many things are still high. It could lead to more interest rate hikes in 2023, but many factors are still at play.
Chris Mediate, financial adviser of Mediate Financial, says the past year has been one of the most challenging financial environments he’s experienced.
“Is the market finally going to find its footing, find its bottom? Is the economy going to slow down but not come to a stop? And the federal reserve, then we’ll see what kind of action they’re going to take,” Mediate said.
Even after the interest rate hikes this year, Mediate says some markets are seeing slight relief such as lower rent and used car costs. But he says the relief is happening much slower than anticipated.
“Look at energy, look at the prices at the gas tank. I mean, things are still pretty high. Food prices are still high,” Mediate said. “So, we are starting to see some relief, but it’s just not quite where the federal reserve wants it yet.”
Mediate says the Federal Reserve could raise interest rates again in the new year to stop inflation. He also said the impacts of 2022 rate hikes could last for years, but, it’s hard to say when exactly we will feel those impacts. Lots of factors will play into those decisions.