The Highest hike in interest rate by the Federal Reserve of USA since 1994

Date

As the inflation is at its highest figure in last 40 years the Federal reserve of US has decided to increase interest rate by another 75 basis point to control inflation. Since unemployment rate is below the targeted rate by Federal reserve it means that wages are on rise and as a consequence of that inflation rate is on increase and the goal of Fed is to keep the inflation rate, Unemployment Rate and economic growth are within controlled ranges. One of the tools that are in the hand of Federal reserve to control all of these is discount rate or fed fund rate or publicly known as interest rate which is overnight interest rate in banking system. All other rates including mortgage loan credit cards interest rates and personal loans rates will be adjusted accordingly.

 

Following pervious article published by me and discussed the effect of last hike is applicable again on this hike in interest rate announcement last Wednesday. In addition to that there will be another hike in this rate in following months till the end of the year.

 

What could be added to this topic is the publisher opinion on these hikes is that the inflation rate increase is just the effect of past pandemic as consumers eager to more spending and this will be temporary while agreeing on this point that these increases in global commodities prices are the effect of Russian- Ukranian war and global supply of commodities as well as oil price increase.

 

What is important to real estate market again is the increase in mortgage loans interest rates and business loans that affects developers and what they will be getting charged by banks.

 

In my opinion, potential investors may have to make their minds in investing in The UAE real estate market so quickly prior of sector getting affected by these hikes and change in prices and payment plans available right now. This is great opportunity for those who are tenants currently to become property owners and reduce their living cost by almost half as the rent is the biggest portion of households living cost.

r

The Author:  MBA graduated from

University of Wollongong Australia

having 22 years business experience

in UAE Construction, Trading and

Real Estate Consultancy Currently

he is Investment٫Financial Consultant

and Expert in UAE Real Estate Market.

Abdulrahman Al Dashti

-
r

The Author:  MBA graduated from

University of Wollongong Australia

having 22 years business experience

in UAE Construction, Trading and

Real Estate Consultancy Currently

he is Investment٫Financial Consultant

and Expert in UAE Real Estate Market.

Abdulrahman Al Dashti

-

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