On Wednesday, March 16, the Federal Reserve will likely take its first steps to combat inflation by raising interest rates for the first time since 2018. With the federal funds rate likely rising by 0.25% and inflation showing no sign of slowing down, ABC News spoke with AlphaCore Wealth Advisory CEO and Founder Dick Pfister, CAIA, for insight on why he believes this combination could become a double-edged sword.
“You might have a credit card, you might have a mortgage, you might have any sort of exposure to debt that would be tied to a Fed funds rate plus some level,” says Pfister. “Yes, it might bring inflation down because fewer people are going to go borrow to buy things because the cost to borrow goes up.”
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