Inflation is officially up by nearly 8 percent in the U.S. compared to this time last year, representing the sharpest spike since 1982. To help curb inflation, the Federal Reserve announced a 25-basis point rate hike last week, marking the first increase in rates since 2018. News On with Miranda Khan recently spoke with Terry Sawchuk, founder and chairman of Sawchuk Wealth, for insight on how the rate increase may affect investors.
“An increase in interest rates is essentially a tax because you don’t get any more for what you’re buying. You’re just paying more to borrow more,” Sawchuk explains. “On the flip side, as a saver, you get a little more if you put your money in the bank but it’s still not nearly enough long-term for people to have any quality of life.”
At the same time, the price for oil and gas slowed its steep uphill trajectory seen over recent weeks, even with projections that it will continue to increase as inflation and the Russia-Ukraine crisis continues.
“I think it’s just temporary,” Sawchuk tells Khan. “The market for oil has cooled off a little bit, mainly because in Europe they are still getting all of their fuel from Russia even though these sanctions are being levied. It will be a matter of time before those sanctions and the disruption of the oil flow entirely work their way through the system. I would not be surprised if the price for a gallon of gas gets well north of five dollars before the summer gets here.”
Any information discussed in this article is for educational purposes only. It is not meant to be any kind of recommendation or financial advice. The information contained in this video is intended for informational purposes only. Any opinions are those of Terry Sawchuk and not necessarily those of JW Cole Financial, Inc. or JW Cole Advisors, Inc.
Securities offered through J.W. Cole Financial, Inc. (JWC) Member FINRA/SIPC. Advisory services offered through J.W. Cole Advisors, Inc. (JWCA). Sawchuk Wealth and JWC/JWCA are unaffiliated entities.