Leaders.com
  • Business
  • Leadership
  • Wealth
  • Master Classes
  • Business
    • Entrepreneurs
    • Executives
    • Marketing and Sales
    • Social Media
    • Innovation
    • Women in Business
  • Leadership
    • Personal Growth
    • Company Culture
    • Public Speaking
    • Productivity
    • Hiring
    • Social Issues
    • Leaders
  • Wealth
    • Investing
    • Cryptocurrency
    • Retirement
    • Venture Capital
    • Loans and Borrowing
    • Taxes
    • Markets
    • Real Estate
  • Master Classes
Public Policy Credit Card

Hiked interest rates hit consumers (Photo by Mario Tama/Getty Images)

By Tyler Hummel Leaders Staff

Tyler Hummel

Tyler Hummel

Tyler Hummel is a news writer for Leaders Media. He was the Fall 2021 College Fix Fellow and Health Care...

Full bio


Learn about our editorial policy

Sep 23, 2022

The Cascading Effect of Rising Interest Rates 

The Federal Reserve’s decision to raise rates Wednesday will raise the cost of borrowing on so many levels—highs not reached since 1995 in some cases. 

Key Details

  • The Federal Reserve hiked interest rates another 75 basis points on Wednesday. 
  • The increased rates may have the effect of gradually slowing inflation but it is also going to make loans and borrowing more expensive for consumers. 
  • Consumers can expect credit card interest, mortgages, loans, auto financing, and other variable rate loans to become more expensive. 
  • “The interest rates on consumer debt like carrying a balance on a credit card tend to move in lockstep with the fed funds rate,” says Forbes Advisor. 
  • “Higher rates increase borrowing costs for businesses and consumers, who will now be coping with a triple dose of three-quarters of a percentage-point hikes—a boost that could make a big impact on your budget,” says CBS News. 

Why it’s news

While the move to slow inflation and bring the volatile economy under control is necessary, the worst affected by higher interest rate payments are going to be the economically disadvantaged and poor, especially those with high mortgage rates or outstanding credit card debt. 

“Now is the time to aggressively pay down high-cost credit cards… Credit card rates are the highest since 1995, mortgage rates are the highest since 2008, and auto loan rates are the highest since 2012,” says Bankrate CFA Greg McBride.

“Fueled by the Fed’s hikes, mortgage rates have surged to the highest level since the Great Recession—climbing from nearly 3.8% at the beginning of the year to more than 6%, and pushing the average monthly mortgage payment up about $750, or 83%,” says Forbes. 

“It is awful that our only tool for controlling inflation is to throw the most disadvantaged workers out of their jobs. It is even worse if we make these people unemployed for nothing,” says The Guardian. 

Backing up a bit

As we previously reported, the Federal Reserve hiked interest rates on Wednesday by another 75 basis points, for the third time in 2022. The Fed is attempting to slow the economy down and stabilize the inflation rate, to decrease it from 8.3% to 2%. 

The Bank of England, European Central Bank, and Switzerland’s central bank all similarly followed suit with their own interest rate hikes of 75 basis points each this week, except for  UK’s central bank which only instituted a 50-point hike.

Fed Chair Jerome Powell understood the dangers of hiking, acknowledging that the burdens that will come with it will fall “most heavily on those least able to bear it.” The decision is likely to stifle economic growth and soften labor market conditions at the cost of households and businesses. 

Home / News / The Cascading Effect of Rising Interest Rates 
Share
FacebookTweetEmailLinkedIn

Related Stories

Wall Street Makes $100 Billion Bet on Weight Loss Pills

by PJ Howland Leaders Staff
Investing

Oct 25, 2023

Ozempic

Investor optimism around a potential blockbuster obesity drug by Structure Therapeutics led to soaring share prices across the weight-loss pharma sector.

Key Details

  • Structure Therapeutics' stock jumped 35% after reporting positive results from early clinical trials of a once-daily weight-loss pill.
  • The experimental drug helped participants lose about 5% of their body weight over one month without side effects, although there are concerns with Ozempic.
  • Analysts predict the global anti-obesity medication market could reach sales of $100 billion by 2030, up from $71 billion currently.
  • With promising growth prospects, investors are betting on companies developing new weight loss drugs like Structure, Eli Lilly, Novo Nordisk, and Pfizer.

Go deeper

FacebookTweetEmailLinkedIn

Seattle Takes The Crown For Advanced Tech Talent

by PJ Howland Leaders Staff
Tech

Oct 24, 2023

Seattle tech talent

Seattle has emerged as the metro area with the most advanced tech talent, beating out tech hubs like San Francisco and Silicon Valley.

Key Details

  • According to a new ranking by the Burning Glass Institute, Seattle has the highest proportion of advanced tech workers compared to other cities with similarly sized tech workforces.
  • The ranking evaluated 60 million high-paying, in-demand tech job postings and histories to identify cities with cutting-edge roles like AI and cybersecurity rather than legacy tech positions.
  • With tech giants Amazon and Microsoft headquartered in Seattle, the city edged out the San Francisco Bay Area, Boston, Austin, and Raleigh on the list.
  • The report found that demand for software developers and IT support specialists has declined over the past five years as companies seek more specialized tech talent.

Go deeper

FacebookTweetEmailLinkedIn

More Americans Can’t Keep Up With Car Payments

by Colin Baker Leaders Staff
Loans and Borrowing

Oct 23, 2023

car loans, used cars

A record number of Americans are behind on their car loan payments as higher interest rates and prices weigh on consumers.

Key Details

  • According to data from Fitch Ratings, 6.11% of car loans were at least 60 days delinquent in September, the highest since tracking began in the early 2000s.
  • Some interest rates on used cars can rise to as much as 21%, according to Bankrate.
  • Soaring prices and rising interest rates are squeezing consumers, making it difficult for some to keep up with their auto loans.

Go deeper

FacebookTweetEmailLinkedIn
Chevron Gas Deal
Markets

Oct 23, 2023

Chevron Makes $53 Billion Deal Amid Surging Gas Prices

by PJ Howland Leaders Staff
nike logo
Company Culture

Oct 20, 2023

Nike to Require More In-Office Days From Employees

by Colin Baker Leaders Staff
blue collar workers
Retirement

Oct 20, 2023

Explaining The ‘C+ Grade’ Retirement Ecosystem in The United States

by PJ Howland Leaders Staff

Recent Articles

Hiring

Nov 1, 2023

Learn the Winning Answers to the Most Common Phone Interview Questions

Come to your next phone interview fully prepared

Personal Growth

Oct 30, 2023

85 Quotes on Self-Love to Boost Your Self-Esteem

Don’t fall into the trap of harsh self-criticism

Company Culture

Oct 27, 2023

What is a Sabbatical? Your Ticket to Restful Growth and Meaning

Sabbaticals can benefits both employees and businesses

  • Business
  • Leadership
  • Wealth
Join the Leaders Community

Get exclusive tools and resources you need to grow as a leader and scale a purpose-driven business.

Subscribing indicates your consent to our Terms & Conditions and Privacy Policy

Leaders.com
  • Privacy Policy
  • About
  • Careers
  • Cookie Policy
  • Terms
  • Disclosures
  • Editorial Policy
  • Member Login

© 2025 Leaders.com - All rights reserved.

Search Leaders.com