Fed Announces Biggest Rate Hike Since 1994

Fed Rate Hike Federal Reserve Building

On Wednesday, June 15th, the Federal Reserve raised the federal funds rate by 75 basis points as many feared they would. This set the rate between 1.5 and 1.75% which is the highest rate seen since immediately before the pandemic. Even worse, high rate increases are still expected. If that comes to fruition, then that will be the fastest pace seen since 1981. It’s expected to reach 3.8% in a year. While inflation is high, unemployment is still low boding well for the economy. Tauro’s Director of Analytics, Jack Carroll, expects many lenders to follow suit and halt lending until the market becomes more balanced. For the majority that do not stop, there will be large adjustments to their lending strategies that almost every borrower will feel.