Make these money moves before the Fed hikes rates again

The Federal Reserve is again poised to raise interest rates in an attempt to slow down the highest inflation in four decades without pushing the U.S. economy into a recession.

The central bank was expected to hike its benchmark rate at each meeting this year, likely by a half-point. But, after May’s worse-than-expected consumer price index report, some analysts are now projecting a 75 basis point increase from the Fed on Wednesday.

As rates rise, there are some key money moves financial experts recommend consumers make to put themselves in a better financial situation and prepare for any impending downturn.

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These broadly include paying down debt and shoring up personal budgets to be able to withstand any sudden shocks to the economy.

“If your New Year’s resolution was to build a household budget, it may need a refresh and a review,” said Cathy Schaeffer, a certified financial planner, vice president and family advisor manager at Baker Boyer in Walla Walla, Washington. Now is the time “to really look at your personal budget and identify some ways to pay down your debt more aggressively as these rate hikes are expected to continue.”

That includes anyone looking to buy a home, is shopping for a car or is carrying credit card debt, according to CFP Lauren Anastasio, director of financial advice at Stash.

“If you are shopping for a home, you might want to ask your lender if you can lock in your rate now,” she said. “Sometimes the lender, for a flat fee, will allow you to lock in today’s rate even if you’re not going to close for another few months.”

Some borrowers are considering adjustable-rate mortgages, which offer lower initial rates but eventually revert to market conditions. People who had ARMs and are nearing the end of that period may want to consider refinancing to a fixed rate.

Car shoppers may want to stick with newer models and avoid the used car market, where prices have jumped the most. Taking time to shop for the best deal you can find is also in your best interest.

“There’s still a lot of value out there,” said Jacqui Kearns, chief brand and strategy officer at Affinity Federal Credit Union in New Jersey, adding that while rates are rising, they’re still historically low.

People carrying credit card debt may also want to contact their lenders to see if they can strike a deal.

“I always recommend that folks actually call their lender and see if they’re able to lower their interest rate,” Anastasio said.

It may also make sense to…