How rising interest rates will impact Mainers

Published: Jun. 15, 2022 at 11:18 PM EDT
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BANGOR, Maine (WABI) - The Federal Reserve has raised interest rates by three-quarters of a point, its largest hike in nearly three decades.

We spoke with University of Maine Professor Pank Agrrawal today to learn what it means for consumers.

His top advice? Be careful with your spending and investing.

Aggrawal says the rise in inflation happened in part from an imbalance in supply and demand.

He say uncontrollable factors such as overseas conflict and supply chain shortages, plus COVID-related impacts on unemployment and the housing market played a role in rising inflation.

Aggrawal says raising interest rates now is a way to slowly drive down consumer demand, realigning it with decreased supply.

”Now that the interest rates are going up, it is going to create a pressure on the mortgage rates,” Aggrawal said. “Being careful with your work, being careful with your spending, the world has changed. Things are changing, and being adaptive is difficult. But, as you know, being adaptive is the number one trait of being a successful species.”

Aggrawal added an economic recession is not necessarily imminent, as long as the interest rates don’t continue to rise dramatically.

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