Federal Reserve Begins Largest Rate Hike Since 1994 In Attempt To Slow Inflation

The federal reserve, once again, is raising interest rates to try and slow soaring inflation and consumer prices.

On Wednesday afternoon, the fed voted to raise rates by three-quarters of a percentage point, the biggest hike since 1994. 

"Right now, the fed is in a very unenviable position," said Jill Schlesinger, CBS News business analyst.

The increase means Americans will pay more to borrow money. Credit cards, private student loans, new car loans, and mortgages will all go up. Alfredo Madrid is a mortgage loan originator at Supreme Lending in Tulsa.

"We're seeing now that same house is costing you a lot more than it did a year ago, than it did six months ago than it did three months ago," said Madrid.

Madrid says there is a lot of fear in the industry right now. Buyers with a 30-year fixed loan on a $250,000 house for example are now paying about $3,600 more per year.

"I think the short-term volatility is due more to that perception than the actual numbers,” said Madrid. “We're going to see inflation at some point curve. We're going to see it stop going up and I think things are going to start stabilizing a little bit."

Despite the rise in interest rates, Madrid thinks it’s still a good time to get in the market. With rates still low compared to historical averages in the 1970s and 80s.

"Those three percent rates, I mean I think they're gone,” said Madrid.

He says the key is to not panic. 

"Really stay calm,” said Madrid. “It's hard to speculate. If you speculated what could or can't be or what the market is or try to time the market, I think you're going to lose. I think those people who bought those interest rates at 11 or 12 percent, they're looking at their equity position and they love it."