CORPUS CHRISTI, Texas — You’ve seen how inflation affects everything, like groceries, housing, and gas.
In order to curb inflation, the Federal Reserve raises the interest rate by half a percentage point, the biggest hike the United States has seen since 2000.
This will affect people who have federal loans and credit cards.
A Corpus Christi resident we spoke to said she had 22 credit cards last year and now has only 10.
She said some of those interest rates are variable, which means they can fluctuate. She said it was hard to cut expenses because she loves shopping, but said it was worth it in the end.
“I cut back on some of the other things I would do like travel and a little more extravagant things until I paid them back,” she said.
Dr. Jim Lee, professor of economics at Texas A&M University-Corpus Christi, said the Federal Reserve hoped to reduce inflation by raising interest rates.
“It’s to discourage people from borrowing and spending, but to encourage people to save,” Dr Lee said.
He said that when we overspend, that’s what causes inflation.
Lee said the stock market is already affected by rising interest rates and while some people may not invest in stocks, pension plans will also be affected.
“More than half of Americans have relied on mutual funds or stock markets to fund their retirement,” he said.
Lee said we could see what economists call a “soft landing”, or a slowdown in economic growth, and that could just be the start of an interest rate hike.
He said it could be another two years before interest rates stop rising.
However, some Corpus Christi residents, like Tony Medina, said he didn’t have a credit card or loan.
He said he avoids interest rates raising the prices of the things he buys by paying off his credit cards on time.
“I usually pay them back before the same day, so I have no problem,” Medina said.