After almost two years of insanely low-interest rates, 2022 had a different story. Here’s a quick recap of monthly average rates in 2022:
To tame inflation, the Federal Reserve started raising rates in March ’22. You can clearly see that sharp increase from March to April. They continued to raise the rates by three-quarters of a percent during the meeting months of May, June, July, & September. Thankfully once inflation reports showed some sign of slowing down, the Fed raised rates in the smaller increment of half a percent in November and December. Thus we start to see the drop off from the October peak in the graph.
As long as we see inflation tapering down, the Federal Reserve will continue the new trend of smaller hikes this year. That being said, if something triggers inflation to go up, we know from last year that the Fed isn’t afraid of more significant hikes.
The Federal Reserve Bank will meet on Jan 31st and Feb 1st. So we’ll be watching closely to see what happens.
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Monthly Average Rates were calculated using Nerdwallet’s Daily Rate Data. Link to Raw Data Here.