Federal Reserve raises interest rates, local financial advisor reacts

Posted on March 16, 2022
On Wednesday, the Dow Jones Industrial Average gained 518 points at the closing bell. (Photo courtesy: WJBC/File)

By Blake Haas

BLOOMINGTON – For the first time since 2018, the Federal Reserve approved its first interest rate increase by a quarter percentage point or 25 basis points.

According to Chris Ruedi, a Financial Advisor with Savant Wealth Management, the announcement cleared the air on Wall Street on the Fed’s stance.

“We knew about the quarter percent increase, (Federal Reserve) Chairman (Jerome) Powell had testified really to that effect a week or so ago. A lot of things move markets, not just one thing. Now that we know the plan, we can start to price that in, and we being institutional investors, markets. I think they have a better idea.”

Higher interest rates immediately increase financial costs and increase consumer borrowing and credit costs.

“What we know now at least what the plan is, expectations, guidance, predictions, forecasts, whatever you want to call them can be based on more concrete information, so I think you’ve seen markets respond well to that.”

On Wednesday, the Dow Jones Industrial Average (DIJA) gained 518 points at the closing bell, while the S&P 500 increased 95 points.

Blake Haas can be reached at [email protected].

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