TAMPA, Fla — Thanks to another federal interest rate hike, it's now even more expensive to borrow money or carry certain debt in America.
Florida Gulf Coast University Economist Victor Claar said the Federal Reserve is working to rein in that demand and to stop the "runaway inflation" we've seen — even if it means temporary financial pain for many Americans.
"It's not good over the shorter term, but over the longer term, it might very well be a price worth paying because nobody wants to live in a country with runaway inflation," he said.
And that pain extends far beyond things like housing and credit card debt and into areas like transportation.
"If prices are high right now, the Fed is convinced that demand is too strong," Claar said.
In August, buying a new car will run you almost $5,000 more than it did a year ago, according to Kelley Blue Book.
Increased costs and interest rates mean that car payments are also up for those who are financing.
Edmunds found that in June, almost 13% of car buyers had payments over $1,000.
"It feels like if you're trying to find affordable, reliable, serviceable cars right now, you're getting hit two times," Claar said. "You're getting hit with higher interest rates and also getting hit with higher prices, whether it's new or used for those vehicles."
Claar said that in all areas, relief for most is a ways off as the Federal Reserve stated that it would keep raising rates over the next few years in an effort to drop inflation from where it sits at 8.3% nationwide to 2%.
That said, Claar also added that Florida might be in a unique position to offer some help to its residents.
"This might be a wonderful time to repeal or at least have tax holidays on things besides gasoline because Florida can afford to do it right now, and Floridians would really appreciate the break," he said.
