As the country watches the financial situation and monitors decisions from the Federal Reserve, many may be re-evaluating what to do with their money, with interest and mortgage rates at some of the highest levels seen in decades. Mark Hamrick, Washington bureau chief and senior economic analyst with Bankrate, joined Cheddar News to provide tips on your money management as monetary policy continues to change.

<div class="block">As the country watches the financial situation and monitors decisions from the Federal Reserve, many may be re-evaluating what to do with their money, with interest and mortgage rates at some of the highest levels seen in decades. Mark Hamrick, Washington bureau chief and senior economic analyst with Bankrate, joined Cheddar News to provide tips on your money management as monetary policy continues to change.</div>

Stretching Your Dollar

Stretching Your Dollar: Managing Your Money After Fed Decision

As we watch the country's financial situation and monitor decisions from the Federal Reserve, many may be re evaluating what to do with their money. Interest and mortgage rates are at some of the highest levels that we've seen in decades. So, what does it mean for you and your financial stability? Well, joining me now to help make sense of it all is Mark Hamrick, he's the Washington Bureau chief and senior economic analyst for bankrate market. It's great to have you in person. Great to see you in person. Thanks for having me, of course. All right. Well, just if you, weeks ago we heard from the Fed and it said that it would pause interest rates at this range between five and a quarter percent and 5.5% rates. Of course, at 22 year highs. What does that mean for Americans managing their money? Yes, I was at that news conference. It's always, you know, interesting to hear what Chairman Powell may have to say. And I feel like, you know, it's very important to be listening to what he and his colleagues have to say, but it's also important to watch what they do. And there is a bit of a disconnect right now between having paused for the second straight meeting and the hawkish talk that he and his colleagues continue to exude because they don't want essentially markets to go wild and for financial conditions to become, let's say extraordinarily loose. So until they can truly declare mission accomplished, trying to get inflation down to that 2% level wherever they think they get within range of that, they're clearly not there yet. And so to the point of your question, what does that mean for all of us non central bankers? I think it means primarily that the war against inflation is still being fought. It's the primary thing that's weighing on consumer sentiment as well as business sentiment. Those are important dynamics of the other part is as we are seeing very recently with new data lending is becoming less available. We know it's expensive, it could become increasingly expensive. We have the 30 year fixed rate mortgage averaging according to bank rate right now at about 7.95%. That's nearly as high as it's been this cycle as we've been tiptoeing around 8% credit card interest rates are knocking on the door at the best levels of about on average 21%. The flip side of all of that is it's a great time for people who are seeking a destination for their savings, right? And it really doesn't take a lot of work at all to find a yield on an annual basis of about 5% plus. And as we've discussed many times as a society and a nation, we are chronically under savers. So now is the time when you really do have more of a priority and an incentive to save money not knowing what's going to happen in the future. Let's talk about inflation because for many Americans, right, buying basic essentials has been a challenge these past few years and in some cases cause them to dig deeper and deeper into their savings just to get by. What's your outlook on inflation? Well, in the next read, we get with the consumer price index that year over year measure is expected to go down from about 3.7% to the low threes that's getting closer to two. But we can talk all we want and I probably will about inflation coming down, but we're not talking so much about prices coming down, right? And so those are two different things, even though they do tend to get sort of lumped together, we're really talking about the rate of increase is moderating, right? So I don't know that the world is going to go out in the next few weeks and find incredibly incredible bargains on anything. Obviously, you know, episodically those things can be done. But Americans are going to continue to feel the brunt of inflation for the foreseeable future. I think that's going to continue to weigh on the outlook and actually on the economy. What does this mean for the stock market? People wondering? Well, should I invest low, sell high if I have a long term time horizon or has the game changed? You know, I think where we sit at bank rate where we're not and this isn't to be derisive or negative about people who are traitors are very short term focus. God love them. And there are plenty of people out there who make a living at it and a very good living. But that's not where our focus is. Our focus is really trying to help. Let's say, you know, the people in our neighborhoods, our relatives, our friends achieve their financial goals. And for most of those people, the reason that the stock market holds an interest to them is they're saving for retirement. And, and so that really is a long term perspective. And I like to remind people that it's not just about the destination of getting to the day that you retire. It's about making that money last for as long as you're still capable of spending money and needing it. Right? And so I think, you know, it's obviously been a volatile, let's just say three plus years with respect to the pandemic, we've been through, it feels like maybe three economic cycles over that time market cycles as well. I think, you know, whether you're looking at a typical 6040 portfolio or maybe even breaking that into 60% equity mutual fund, ETF fixed income, maybe 10% cash there, cash has a lot of or if it's invested or saving properly. But the main thing is to be focused on the game rather than ignoring it. And obviously, the stock market over the long term is the place for superior return. You have to be willing to ride out that short term volatility. My last question finally, Mark is what should people do if they are in the market to buy a home? Obviously, rates are very high right now, but of course, they could refinance that rate down the road. Well, we don't have a guarantee that rates will be lower in the future so that refinancing opportunity if you will may exist, but we can't take that for granted, right? So for me, if I were in the market or giving a friend or relative, some advice, I'd say, obviously, don't get too far out over your skis on which is the main challenge between that high rate of interest and the high cost of many homes around the country. But I would say try to live not only within your means, but beneath your means because once you own a house that becomes an opportunity to spend money on repairs and everything else that life really throws our way. And so rates may come down, they may, but there's no guarantee. And so, you know, if you need to buy a home now, you know, go for it. You know, there's not going to be a lot of inventory out there. New homes are perhaps among the most telling opportunities because of the incentives the builders are giving with buy downs on the interest rate. I think that's where I would tend to be focused right now if I had to do that. All right, Mark Hamrick, here at the New York Stock Exchange for us. Mark. Thank you. Thanks for having me. Great to see.