Bean Capital - Global Inflation: Five Ways US Recent Rate Hike Can Affect You

The US central bank has announced its biggest rate hike in nearly 30 years as it ramps up its battle to bring soaring consumer prices under control.

It lifted the rate the Federal Reserve charges banks to borrow by three quarters of a percentage point.

The consequences will be felt in nearly every corner of the economy - in the US and abroad.

Here, Bean Capital delves into the five main reason why US inflation will have an impact globally.

#1: More expensive mortgages and other loans.

The immediate impact is in the US, where people will face higher borrowing costs for mortgages, credit cards, student loans and other debt.

The average rate on the popular 30-year fixed home loan has already surged to nearly 6% - its highest level since 2008. For the person buying a median-priced home in the US, that means monthly payments have gone up by about $600 since the start of the year.

The National Association of Realtors expects home sales in the US to fall 9% this year. That drop might feel painful to people prevented from purchasing, but it is also expected to cool price growth to 5% in 2022, after double digit gains in recent years.

If that happens, it will help bring down inflation, a sign the Fed's moves are working.

What does this mean? - Higher rates globally.

Those dynamics mean the US is not hiking in a vacuum.

Dozens of other countries have also announced rate rises in recent months, including the Bank of England, Switzerland. Australia and Canada.

Many are fighting their own battles with inflation.

But they are also taking cues from what's happening in the world's largest economy.

In countries like Kuwait and Saudi Arabia, where currencies are tied to the dollar, the impact of US rate rises is almost immediate, with banks hiking in lockstep, as they try to contain an outflow of funds to the US.

As those moves start to be felt on the ground, the economic story in the US will continue to be closely watched.

To read the full report and learn the four other factors needing consideration, and gain access to our latest views and opinions, visit https://www.beancapitallimited.com and sign up to our newsletter service.

Bean Capital Limited
Horsford Business Complex, Farms Estate, St. Kitts and Nevis
PR contact - Jason Hemsworth
Email - pr@beancapitallimited.com
Tel - +1 (869) - 555 - 2500

Bean Capital is a privately owned investment boutique, providing top-tier, professional and transparent financial advice to investors globally. At Bean Capital, we understand that finding the right advisor can be an arduous task.

Balancing advice and guidance with your needs and wants is a fine line which can be difficult to follow given vast array of financial products investors have at their disposal.

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This approach enables us to provide only the finest instruments for our clients' needs, and to tailor investment solutions to the individual financial goals of each client.

At Bean Capital, we are a group of expatriates, so we understand the nuances of the needs and wants of global investors and our financial and tax advisors are qualified to consult across multiple jurisdictions. We are dedicated to supporting our clients, by acknowledging their goals and circumstances we are pivotal in ensuring a smooth and trouble-free transition from domestic to international wealth management.

This release was published on openPR.