Federal Reserve Hikes Interest Rates Amid $40 Trillion Debt

The Federal Reserve has raised interest rates for the first time since 2023 to combat inflation. The national inflation rate is currently at 3.4 percent, well above the 2 percent target rate that hasn't been reached since early 2021.

Cedarville University Economics Professor Dr. Jeff Haymond notes that this increase in interest rates is largely due to the government's debt control issues. The national debt has surpassed $40 trillion, and according to Dr. Haymond, 'these higher interest rates are in large part because our government has not got its debt control.'

The impact of these increased interest rates will be felt by borrowers, who may face higher costs. However, savers can expect to see more money in their accounts as a result.

Dr. Haymond believes that another interest rate hike is expected later this year and that rates will not go back down until inflation rates are at 2 percent. He also notes that neither political party is interested in tackling the debt, which contributes to the problem of rising interest rates.