DAYTON — The Federal Reserve raised interest rates today for the first time in three years in an effort to battle inflation.
The Federal Open Market Committee increased the target range for the federal funds rate by 0.25 percentage points to between 3.75% and 4%.
The interest rate increase follows the latest update from the Consumer and Producer Price Index, which showed a 0.4% increase.
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The central bank enacted the rate adjustment as part of its efforts to bring inflation back toward its 2% target.
Jared Pincin, an associate economics professor at Cedarville University, had predicted the rate increase following the recent price data.
“If the index is rising, that means that basket is more expensive than it was in the previous time,” Pincin said.
He also addressed the central bank’s record on managing rising prices, noting that “the Federal Reserve has not done a great job of keeping inflation close to their 2% mark in a while.”
Higher federal interest rates mean consumers face increased costs when paying back loans and carrying balances on credit cards.
Local shoppers in Montgomery County reported that managing household budgets has grown increasingly difficult.
Twanda Moody, a Dayton resident, described how higher costs have changed her routine.
“I don’t even shop by the month. Can’t afford to. I don’t get assistance so you know you can’t shop by the month; you shop as you need it,” Moody said.
She noted that managing expenses under higher interest rates remains a struggle for local workers.
“There’s no way to get out and you try to just continue on. But it’s very difficult,” Moody said. “And may I also add, we need raises to go along with these interest rates and things.”
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