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By: Kerry Pipes | 685 Reads | 1 Shares |
WalletHub, the personal finance website, has released the results of a new Fed Rate Hike Survey that measures how people see Federal Reserve rate increases impacting them directly, particularly in a time of high inflation.
“Federal Reserve rate hikes have contributed to record-high credit card interest rates. The Fed increased interest rates by 425 basis points in 2022, which means consumers will pay around $27.2 billion in extra interest charges in 2023 alone, and this is not even counting hikes that actually happen in 2023,” said Jill Gonzalez, WalletHub analyst.
The report goes on to highlight how Americans remain concerned about inflation and how it will impact their spending this year.
Some Key Survey Stats:
- 2 in 3 Americans think inflation is going to be worse in 2023 than in 2022.
- Nearly 9 in 10 people say inflation will impact their spending in 2023.
- 70% of Americans say their monthly grocery expenses have been affected by inflation the most, followed by gas (21%) and housing (9%).
- 87% of Americans are concerned about inflation right now, 8% more than in December 2022.
- 70% of Americans think a recession is inevitable.
- 45% of Americans are not financially prepared for a recession.
Projected Impact:
- A 25-basis point increase in the Fed’s target rate will cost credit card users at least $1.6 billion in the next 12 months.
- The Fed’s Feb. 1 rate hike has already increased the cost of the average 30-year mortgage by $9,360 over the life of the loan.
- WalletHub expects the average APR on a 48-month new car loan to rise by around 12 basis points in the months following the Fed’s next 25 basis point rate hike.