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Soon-to-be graduate reacts to another interest rate hike, Economist says start saving now

One student graduating in December 2022 plans on taking out business loans, which will cost more with rate
Posted at 6:15 PM, Sep 21, 2022
and last updated 2022-09-21 20:47:18-04

COLORADO SPRINGS — As inflation sits at 8.3% year over year, the Federal Reserve announced another interest rate hike on Wednesday. This is the fifth increase in rates so far in 2022.

The move is "expected" according to Dr. Joe Craig, a UCCS Economics Professor.

"They've been very clear that they are going to keep raising interest rates until we see inflation slowing down... And inflation is slowing down. We only saw 0.1% up over the previous month, but it's still very high."

For students on the cusp of graduating, another rate hike of 0.75% can add stress to entering the workforce.

"It's just really challenging for young graduates who are entering the professional world. Maybe they can't quite get the start that they wanted," says Aidan Westbrook, graduating from UCCS with an Economics degree in December.

Westbrook is a business owner already and plans to take out business loans in order to expand, which will cost more now.

The move will impact loans including credit card interest, mortgages, and vehicle financing, and Craig believes America will see another rate increase within the next several months.

"Fed is committed to getting inflation down, so I have reasonably high confidence that they are going to do that. Might it cause a recession? It might cause a recession, but they are willing to pay that price, for better or for worse," says Craig.

For those who have recently graduated or are about to graduate, Craig recommends starting to save where you can right now.

Westbrook encourages his peers to use resources online in order to educate themselves about beneficial financial moves right now, what to avoid, and how to pay off debt they may already have.

"Educate yourself further. It may not be the most fascinating... But it should be externally and intrinsically important for you to be able find things and find information that's going to save you thousands of dollars over the course of your life."
Aidan Westbrook, UCCS Economics Student

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