What does a Federal Reserve interest rate hike mean for Main Street?

[libertybele]

What does a Federal Reserve interest rate hike mean for Main Street?

The Federal Reserve, as expected, raised interest rates by 25 basis points for the first time since late 2018. Policymakers also signaled the possibility of six more hikes this year as they seek to combat soaring inflation.
Federal Reserve

While the central bank's actions are closely monitored by Wall Street, folks on Main Street will be impacted, too.

An increase in interest rates means higher borrowing costs, so consumers and businesses can expect to pay more for car loans, mortgages, and credit card balances. Those additional costs cause shifts in consumer behavior.

John Lonski, president of Thru the Cycle and former chief capital markets economist at Moody's Analytics, says consumers might not feel the pain of an initial rate increase by the Fed, but they will certainly notice the hikes if they continue through 2022.

Although a series of rate increases are expected, forecasting the Fed's behavior for the rest of the year is "a fool's errand" given the uncertainty with Russia's war on Ukraine, Lonski told FOX Business.

In the meantime, he says that anyone carrying credit card debt should work to pay down balances and that folks considering the purchase of a house should not put it off – although sky-high home prices have already made ownership unaffordable for many would-be buyers................

https://www.foxbusiness.com/economy/federal-reserve-interest-rate-hike-main-street

[DefiantMassRINO]

More pain and government picking the winners - the too-big-to-fail getting bigger and small businesses pushed out of business.

[catfish1957]

One hush hushed aspect of this expected flurry of rate hikes, will be the financial crisis that will be due to historic savings/lending rate differentials. 

With banks, credit unions, etc. having so much capital locked into low rates (and long term mostly in 15 and 30 year mortgages, many at 2-3%),  guess what is going to happen when they have to start paying CD holders rates of 4%, 5%, and even higher.

It has been utter stupidity to see the mass influx of construction of little banks and credit unions. 

Just watch the news when FDIC and NCUA, hit the same and massive state of insolvency as the FSLIC did in the late 1980's. , I am betting when the SHTF, and our financial instituions won't be able to cover their losses. And guess what, they'll be bailed out by an entitiy that is pretty much self-insolvent ($30T+ in debt)

1st point of crisis, wull be the banks won't offer competitive rates, and savers will haul their money out.
Crisis 2 benchmark, banks won't have the capital to fund their loans.

Boom!!!

The dog chasing its tail and warp speed.

[Smokin Joe]

It means if you are going to board up the windows when you go out of business, you'd better get your plywood loan now...before the rates go up.