WASHINGTON–With the Federal Reserve almost certain to again hike rates when it meets next in early February, a new consumer poll finds most Americans expect inflation will continue to get worse.
The same analysis also offers some insights into just how another rate increase will hit consumers payments on credit cards, mortgages, auto loans and other financial products.
The survey, conducted by WalletHub, found:
- Two-in-three Americans think inflation is going to be worse in 2023 than in 2022
- Nearly nine in 10 people say inflation will impact their spending in 2023
- 70% of Americans say their monthly grocery expenses have been affected by inflation the most, followed by gas (21%) and housing (9%)
- 87% of Americans are concerned about inflation right now, 8% more than in December 2022
- 70% of Americans think a recession is inevitable
- 45% of Americans are not financially prepared for a recession
Projected Effects
Separately, WalletHub said its analysis of what a 25-basis-point increase in the Fed’s target rate will cost consumers at least $1.6 billion more in the next 12 months.
“The Fed’s Feb. 1 rate hike has already increased the cost of the average 30-year mortgage by $9,360 over the life of the loan, as rate hikes are usually priced into mortgage rates in advance,” WalletHub said.
WalletHub said it expects the average APR on a 48-month new car loan to rise by around 12 basis points in the months following the Fed’s next 25 basis point rate hike.
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