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08-01-22 | News

Federal Reserve Raises Federal Fund Rate

The NAHB Reports that the Federal Reserve has increased the Federal Funds Rate by 0.75%
by Staff

The Federal Fund rate slows down the economy as it makes borrowing money more expensive for consumers and businesses.

As of July 27th, and according to the National Association of Home Builders (NAHB), the Federal Reserve hiked up the rate for federal funds by 0.75% to try and combat inflation. This is after the month of June, which saw similar aggressive action to fight inflation, and raises the Fed rate to 2.5% which will slow the economy through making money more expensive to borrow for consumers as well as businesses.

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The NAHB points out that housing already seems to be facing a recession, with home builder sentiments declining for seven months straight and a decline in the pace of home sales to match. Fed Chairman, Jerome Powell stated that data will be the biggest way to avoid a recession as it will allow the Federal Reserve to act preliminarily and take measures to avoid that outcome.

https://www.nahb.org/blog/2022/07/fed-rate-hike

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