This isn't the Fed's first inflation rodeo

Welcome to The Money, where we break down financial news and provide the TL;DR version of how decisions by the Federal Reserve, government and companies impact you.

The Fed is expected to raise interest rates by another 75 basis points today. For consumers, that means it'll be even more expensive to take out loans and pay off credit card debt . And unfortunately, for some it could result in job losses down the line.?

The Fed is doing this in an effort to bring down inflation, which currently hovers around a 40-year high of 8.3% annually. Economists expect the Fed to continue hiking rates until inflation hits its target of 2%.

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Using history as a guide?

Combating high inflation is hardly a new challenge for the Fed. But each time, the nation's central bank has dealt with it a bit differently .?

The Fed is currently testing the waters with how high it can raise interest rates to lower inflation without putting too much of a damper on employment. So far, it has been successful in that higher interest rates haven't resulted in higher unemployment, but at the same time, inflation hasn't really budged.

Home building boom slows down

Homebuilders were thriving during COVID. [Cue Oprah] You get a home, you get a home, everybody's getting a home!?

But the boom is winding down as mortgage rates hit their highest levels since 2008. By many counts, it's still a seller's market, though.

The inventory of affordable "starter homes" is dwindling. According to the U.S Census Bureau, the share of new homes sold priced under $300,000 was 38% in 2020, 23% in 2021, and only 11% in the first seven months of 2022. Supply isn't catching up to demand in part because rising materials costs mean homebuilders aren't making as much from these homes.

To 'fixer-upper' or not?

That is often the question homebuyers are agonizing over these days.?

With 30-year fixed mortgage rates topping 6% for the first time since 2008, homebuyers are hungry for bargains . Some are finding big savings in fixer-upper homes.

The median cost of a fixer-upper in the U.S. is around $225,000; that's about 45% cheaper than turnkey homes in cities that are the same size, according to Porch, a home-improvement site connecting homeowners and contractors. By comparison, the median price of an existing home is around $403,800, according to the National Association of Realtors.?

Your small biz should be on TikTok

Small businesses are thriving on TikTok . Why? They can tap into the platform's niche communities to attract customers from beyond their local neighborhoods. The search algorithm also helps users find small businesses efficiently.

And if you're wondering whether it's worth it to start a TikTok account for your small business consider this: Half of Gen Z TikTok users are likely to buy something while on the app, according to TikTok data.

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