Consumers Affected As Federal Reserve Raises Rates

Los Angeles, CA – As expected, the Federal Reserve raised short-term interest today rates by .25% for the first time in four years. Last Friday, the Commerce Department reported that gross domestic product found that prices paid by consumers for items other than often volatile food and energy rose by 2 percent, rather than the previous reading of 1.7 percent. Inflationary pressures are one of the reasons for the increased interest rate.

"The American economy has finally recovered from the dot com bubble burst, as well as the attacks of 9/11 and the Iraq War,' said Richard M. Krawczyk, Ph.D., author of the #1 bestselling book Financial Aerobics: How to Get Your Finances into Shape (Cavalier Publishing). "The economy is robust and should continue to move in a positive direction. It will most certainly help the current administration in their hopes for re-election this fall.'

This rise of short-term interest rates will affect consumers in their monthly bills that are directly tied to interest rates such as car loans and credit cards. Mortgage interest rates are generally affected by the rate of the 10-year Treasury Note and not the short-term interest rate.

"It is doubtful that the Federal Reserve will take drastic steps to slow down this economy,' said Dr. Richard. "They will more than likely take a measured pace to combat inflation and slightly increase rates over an extended period of time. It usually takes about 7-9 months to feel the true effect of any change in interest rates. However, I would expect another small increase of .25% within the next few months.'

About Dr. Richard
Richard M. Krawczyk, Ph.D. (pronounced Krawf-check) a/k/a Dr. Richard – America's Financial Fitness Trainer™ is the publisher of The FinancialFitnessTips.com Report and is one of the nation's leading experts on personal finance and consumer credit. On May 17, 2004, Financial Aerobics topped Amazon.com's bestseller list, where Dr. Richard was crowned the "Dr. Phil of Finance' and outsold perennial financial mainstays such as Rich Dad, Poor Dad. He is a former investment banker and now runs the consulting firm of Dr. Richard Enterprises, based in Los Angeles.

Dr. Richard is available for interviews.

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