FILE - Federal Reserve Chair Jerome Powell speaks during a news conference at the Federal Reserve in Washington, May 1, 2024. WASHINGTON — The sharp interest rate hikes of the past two years will likely take longer than previously expected to bring down inflation, several Federal Reserve officials have said in recent comments, suggesting there may be
On Friday, Dallas Federal Reserve President Lorie Logan said that it is “just too early to think” about cutting rates, according to news reports. She also suggested that it is unclear whether the Fed’s rate is high enough to quell inflation. Logan is one of the 19 officials on the Fed’s interest-rate setting committee, though she does not vote on rates this year.
Yet despite those sharp increases, Americans, on average, spent just 9.8% of their after-tax income paying interest and principal on their debts in last year’s fourth quarter. Two years earlier — before the Fed hiked rates — they spent 9.5%, a historically low percentage. Many large corporations also locked in low rates before the Fed began hiking, further limiting the impact of higher borrowing costs.
And Americans, in total, are carrying much less debt as a percentage of their incomes than they did during the housing bubble 15 years ago, Lupton notes.
Source: Loan Digest (loandigest.net)
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