Expert: The recent interest rate hike by the Federal Reserve will impact the US job market, affecting 70% of homeowners to repay loans. The Federal Reserve | United States | Homeowners
Federal Reserve Chairman Powell
On July 28th, according to a report by Russia's satellite news agency, a US wealth manager said that the latest interest rate hike by the Federal Reserve is aimed at curbing the job market as a means of controlling inflation, which will affect 70% of US homeowners in repaying their loans.
On the 26th, the Federal Reserve announced another 25 basis point rate hike, raising the target range of the federal funds rate to between 5.25% and 5.5%, reaching the highest level in 22 years. David Tavel, co-founder and financial expert of ProChain Capital, a hedge fund company in the United States, said that the Federal Reserve is causing Americans to lose their jobs and reducing demand for commodities by suppressing consumption. Tavel said that during the pandemic, the inflation rate in the United States increased, and the US government continued to print money and provide various loans and subsidies to businesses for the next 18 months. This led to a consumption frenzy, ultimately pushing up prices and further inflationary pressures. The Federal Reserve, on the other hand, mechanically raises interest rates in an attempt to curb inflation.
Tavel stated that the goal of the Federal Reserve's interest rate hike is to raise the unemployment rate, which may keep it at 4% to 5%. Tavel said that the pain of unemployment will be widespread, as up to 70% of homeowners are still paying off their loans. Tavel explained that the interest rates in the United States were once low, at 2% and 3%, and people would not feel pressure on a 30-year home purchase loan or any remaining amount in the loan; If these people go to buy a house now, they must take out more loans to achieve this, and the loan interest rate may reach 7% -8%. "In terms of the monthly repayment amount of the same amount of loans, this is a huge difference.".
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