According to multiple News outlets, including CNBC, the United States Federal Reserve ended its scheduled two day meetings. Here is what we learned.
They left their rates unchanged. Many expecting to see a cut walked away disappointed. They have maintained their status que nature with the rates after a heavy season of rate hikes.
Middle Child Money put out an article on Understanding the Federal Reserve and the Impact it has on the US Economy. Read it here.
What is the Federal Reserve?
Investopedia is a great resource to do a deep dive. I love the easy to understand resources they offer.
Essentially the Federal Reserve System is the Central Bank for the United States. This is the group that attempts to create a stable environment for the country and its people to operate within. They are concerned about things like inflation rates, Gross Domestic Product (GDP), Interest Rates, how large banks interact with each other. They set policy monetary policy.
What is the "Rate" they talk about?
Great Question. This is the rate at which large banks, can lend to each other at. This is not the rate that you borrow money from the bank at, or the rate which you could get a new mortgage at. Although, there is a trickle down effect, which is what we will discuss below.
Why does this matter to me?
As I mentioned above there is a trickle down impact for where the FED sets the rate. As they have increased it, and the rate at which large banks can borrow money at increases, so there your rate at which you can borrow money also increases.
Do you have credit card debt? Well this is likely going to hurt more. With rates sitting higher than normal (in the past decade) the cost of holding onto credit card debt is huge right now. If you are holding credit card debt, our HUGE recommendation is that you begin to quickly pay off those high interest rate cards.
Use this Post to help understand where to find your rate, and what it means.
If you can avoid it, try not to stack up the credit card debt.
Final Thoughts
We do have to realize that in our lifetime these rates are going to change and fluctuate, but we cannot let them dictate (different than informing) how we chase our financial goals.
Consider this… If you have been waiting to buy a house for the rates to come down, please don’t let the cadence of your march be dictated by what the federal government does. You need to create a financial plan for you and your family, and stick to that. If the timing is right for your family to buy a home, and you can afford it please stop waiting for the “rates” to come down. You will never be able to “time the market” like you think. My guess is there will always be a reason not to that stands in the way.
Create a financial plan. Stick to it. Enjoy the Journey of the Middle Child Way.
Check out some of these resources we have provided.
3 Tips for Family “Cash Flow” Budget
5 Budget Tips for Families for 2024
Investing 101: Stocks: A Beginner’s Guide to Understanding Stocks
