The Balance Today: News You Need To Know on Nov. 3, 2022

Were you hoping that the Federal Reserve would slow down its aggressive pace of rate hikes? Well think again. Yesterday the Fed increased interest rates by another 75 basis points as expected in its fight against inflation, which remains persistently high. In a press conference with reporters, Fed Chair Jerome Powell said that it was “premature” to think about pausing rate hikes, and that the central bank would keep going “until the job is done.

Stocks are reacting to the news, and markets are falling as investors realize that the pain train is going to keep chugging along, hitting future corporate earnings. Tech companies could feel it the most, so this might be a good time to make sure that your portfolio is a little more diversified. If you’re heavily invested in the tech sector, your investments could continue to feel the sting. 

Even if you aren’t looking too closely at your investments, you might still be impacted by higher interest rates. Rising interest rates are a tool used to slow down the economy, so these rate hikes should bring higher unemployment, and possibly a recession. If you want to buy a house, or a car, or get a loan from the bank, it will cost you more money. Your credit card debt will also become more expensive as credit card interest rates also rise. 

Tomorrow, we’ll see how rate hikes have impacted the jobs market so far with the Labor Department’s report on how many jobs were added last month. The labor market has been resilient, but that could change. We’ve gotten an early indication today on how the labor market is doing: Jobless claims, or people filing for unemployment for the first time, decreased to 217,000 in the latest week, holding close to historically low levels. That also doesn’t bode well for us, as a strong jobs market means the economy can handle even more rate hikes.