The latest interest rate hike and how it affects Wisconsinites

STEVENS POINT, Wis. (WSAW) - The fed once again made the decision to raise interest rates, this time by a quarter point and it now sits at 5.25%, now marking the tenth rate increase in just over the last year.

However, there is some upside to the high-interest rates. “A raise in interest rates is awesome for people who are saving, but costly for people who are borrowing. That’s why there’s this double-edged sword when the fed is increasing interest rates,” said Jason Glisczynski, financial planner, CEO of Silvertree Retirement Planning, Stevens Point.

Wednesday’s quarter-percent hike comes on the heels of another major bank failure earlier this week. “The interest rate is an attempt to bring that inflation by increasing costs of goods sold and slowing down consumers,” added Glisczynski.

As banks tighten their belts, lending will have an impact on the housing market.

“The possibility of increasing cost of goods, or building a home or rehabilitating a home or remodeling all of these costs have gone up and everything often ties back to the interest rates so it definitely has an effect on everybody here in central Wisconsin,” said Glisczynski.

It’s not the big corporations that will suffer most, it’s the small businesses. “They are going to be put under more pressure because of the cost of funds to purchase a new machine and the increasing cost of materials that they need and so it’s kind of double whammy for small businesses,” said Glisczynski.

Glisczynski has seen a lot of activity currently with people repositioning their money. “Saving without having to take market risks if you have cash that’s not earning a fair interest rate, it might be time to shop around.”

The last time the interest rate was this high though, was in August of 2007.