The Fed’s rate increase will hit car loans, new mortgages, credit cards

Mar 15, 2022, 12:13 PM | Updated: 12:18 pm
home for sale in hot housing market...
FILE: A home, available for sale, is shown on August 12, 2021 in Houston, Texas. Photo: Brandon Bell /Getty Images

SALT LAKE CITY — Borrowed money is about to get slightly more expensive, as the Federal Reserve is expected to raise its key interest rate by a quarter percent on Wednesday. 

The interest rate increase is an attempt to slow inflation by first slowing borrowing and spending. 

Interest rate increase addresses frenzied growth

DMBA certified financial planner Shane Stewart said this comes after frenzied growth has over-inflated the economy.

“(The Fed move) is meant to slow that down a bit and let the economy catch its breath,” Stewart said. “So what that means for the average person is if you’re looking to make a major purchase like a home or a car, that money that you borrow will be slightly more expensive. 

Stewart said the Fed raising rates will ultimately impact everything. 

“It takes some time for that to trickle down,” Sewart said. “But it does affect just about every industry. Because if people are spending less, then it affects the business and a business might slow their production down or not have as many people working for them.”  

This is why the Fed raises rates little by little over time. It’s called a “soft landing.” 

“Where the economy’s been so high and they’re trying to bring it down with a soft landing, rather than a crash,” Stewart said. 

The increases will be most noticeable in credit card rates, new mortgages and car loans.

But savings accounts will also get a small bump. 

“I know that the number of those savings rates are up incredibly through the pandemic,” Stewart said. “Hopefully we now get higher returns on those in keeping up with inflation.”

“And we need to get higher rates of return because if you don’t have something that keeps up with inflation, you kind of go broke safely,” Stewart said. 

The average rate for savings accounts is projected to increase from 0.06 percent to 0.11 percent this year, according to Bankrate.

Related reading:

Today’s Top Stories


tax increase...
Mark Jackson

Tax increase in Salt Lake County for the library system

Salt Lake County Residents will see a slight tax increase. The county approved a budget for 2022-2023 the will help update the library system.
1 day ago
Elizabeth Weiler

Financial infidelity: What does the Utah data look like?

The average Utahn would 'reconsider their relationship' if their partner spent $5k without consulting them first, reveals research from coupon birds.
2 days ago
A sale sign stands outside a home in Wyndmoor, Pa., Wednesday, June 22, 2022. If you’re settling ...
Curt Gresseth

Selling your home? Try staging your house, pro says.

A professional shares advice on staging a home before selling.
3 days ago
Shoppers walk through City Creek Center in Salt Lake City on Wednesday, Dec. 8, 2021. The Better Bu...
Mark Jones

Making the most of Black Friday, Better Business Bureau has tips

The Better Business Bureau offers tips to those shoppers who plan to shop in person on Black Friday.
15 days ago
free transit rides...
Elizabeth Weiler

Free public transit rides come to Heber Valley

HEBER CITY, Utah — In the summer of 2022, Wasatch County Council approved a sales tax which is now providing funding for free public transit rides throughout Heber Valley.  Wasatch County and High Valley Transit entered a three-year, $3 million agreement to offer public bus transit services between Wasatch and Summit Counties, along with micro-transit […]
16 days ago
The disparity in gas prices, both across Utah and the United States, has to do with supply, demand,...
Heather Kelly

Gas prices tumble in some US cities, not so much in others

The good news is that gas prices are down most everywhere, but several factors that determine the cost of gasoline prevent consistency.
17 days ago

Sponsored Articles

Spicy Homemade Loaded Taters Tots...

5 game day snacks for the whole family (with recipes!)

Try these game day snacks to make watching football at home with your family feel like a special occasion. 
Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...

The best tools for Deaf and hard-of-hearing workplace success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
christmas decorations candles in glass jars with fir on a old wooden table...
Western Nut Company

12 Mason Jar Gift Ideas for the 12 Days of Christmas [with recipes!]

There are so many clever mason jar gift ideas to give something thoughtful to your neighbors or friends. Read our 12 ideas to make your own!
wide shot of Bear Lake with a person on a stand up paddle board...

Pack your bags! Extended stays at Bear Lake await you

Work from here! Read our tips to prepare for your extended stay, whether at Bear Lake or somewhere else nearby.
young boy with hearing aid...

Accommodations for students who are deaf and hard of hearing

These different types of accommodations for students who are deaf and hard of hearing can help them succeed in school.
The Fed’s rate increase will hit car loans, new mortgages, credit cards