Interest rates are rising.
For those who borrow and spend, that's bad news.
For those who save, that's good news.
The Federal Reserve Board said it will use its money market influence to raise interest rates, as its way to control inflation -- rising prices as an inflated money supply chases to buy stuff.
But as people stop chasing to buy stuff, they will put the money aside in savings accounts. Already, interest rates on savings accounts have started to rise as financial gurus saw the change coming.
News reports usually emphasize the negative side of events, and that's what happened today as the Fed announced an uptick in its target for interest rates.
For those who buy on credit, that's bad news. A result is that people who use credit cards a lot will either pay in cash or they will not buy as much stuff, and put more money into savings accounts.
Recently, credit card interest rates have been in double-digits, so those who don't pay the balance in full every month pay dearly for their borrowing. At the same time, traditional bank savings account rates have been close to zero -- 0.001 percent, for example.
Why bother saving, goes the thinking. Instead, buy more stuff. That's okay, but unless production rises to meet demand, prices will rise.
Prices have been steadily rising, to the extent that the Fed concluded the increases have been too much for good economic health. Result: Brake time.
For those who borrow and spend, that's bad news.
For those who save, that's good news.
The Federal Reserve Board said it will use its money market influence to raise interest rates, as its way to control inflation -- rising prices as an inflated money supply chases to buy stuff.
But as people stop chasing to buy stuff, they will put the money aside in savings accounts. Already, interest rates on savings accounts have started to rise as financial gurus saw the change coming.
News reports usually emphasize the negative side of events, and that's what happened today as the Fed announced an uptick in its target for interest rates.
For those who buy on credit, that's bad news. A result is that people who use credit cards a lot will either pay in cash or they will not buy as much stuff, and put more money into savings accounts.
Recently, credit card interest rates have been in double-digits, so those who don't pay the balance in full every month pay dearly for their borrowing. At the same time, traditional bank savings account rates have been close to zero -- 0.001 percent, for example.
Why bother saving, goes the thinking. Instead, buy more stuff. That's okay, but unless production rises to meet demand, prices will rise.
Prices have been steadily rising, to the extent that the Fed concluded the increases have been too much for good economic health. Result: Brake time.
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