Great News For Our Economy In Michigan
The Federal Reserve has raised the rate of short-term borrowing for the third time this year. This rate is a benchmark for many of our consumer and business loans.
In a perverse way this is good news to all of us, well I should say it is bad and good news.
The bad news is obvious, we will have to start paying about a quarter of a percentage point more for some of our borrowing.
The good news is that the U.S. economy is doing so well the Federal Reserve believed they had to raise rates for a third time this year alone to combat possible inflation.
Inflation is defined as:
Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. Central banks attempt to limit inflation — and avoid deflation — in order to keep the economy running smoothly.
During the entire 8 years of former President Obama’s administration the Federal Reserve only raised rates once. Yes you read that correctly only once, which means the Federal Reserve never believed that they economy was every doing that well under Obama because if they did they would have raised rates.
As is stated it is a good news bad news situation, if you are in need of borrowing money you might have to pay a bit more. The good news being that you are probably making more money, found a better job or the fact that a good economy helps everyone in the United States, even our beloved government when it comes to taxes flowing into the Treasury.