Denver 7: Interest rate hike ahead of holiday shopping season has Denver shoppers thinking twice before buying gifts

Posted at 7:15 PM, Nov 02, 2022

and last updated 2:15 AM, Nov 03, 2022

DENVER — Tis' the season for saving. Well, at least economic and financial experts think so.

The Federal Reserve announced another federal funds interest rate increase Wednesday — the fourth consecutive three-quarter point hike this year. The effective federal interest rate is now at 4% for the first time since late 2007. Interest rates peaked at 5.25% in late 2006 and early 2007, roughly a year before the U.S. entered a recession.

This comes as inflation remains above 8%, the worst in four decades.

"Because of this higher prices on necessities, it is very important that we keep raising the interest rate. And we will expect the increase in interest rate would mean lower borrowing and lower expenditure, and that's why the prices are hopefully going to come down," Metropolitan State University Denver economics professor Kishore Kulkarni explained.