Interest rates could soon fall, but not fast enough for some in Sacramento area | Call Kurtis
SACRAMENTO — Interest rates could soon fall, but not fast enough for some Sacramento-area residents.
The federal government announced Wednesday that it will keep interest rates where they are for now, but that could change in the next few weeks.
Ashtan Weatherspoon of Sacramento has noticed a jump in fast food prices following California's mandate to raise the minimum wage for fast food workers to $20 an hour.
"The prices are outrageous," Weatherspoon said.
We spoke with her while dining at Queen Sheba restaurant in Sacramento. Weatherspoon, a truck driver, regularly frequents fast food restaurants while driving her truck routes.
"For a basic burger, I pay $8. That's ridiculous," she said.
"Everything's gone up since that $20 an hour went up," Tanya Lopez of Sacramento added after having lunch at California Pizza Kitchen at the Arden Fair Mall.
Wage growth across the country, however, is slowing. The job market is also cooling, and the unemployment rate is starting to creep up. Inflation is now at 3% and is inching closer to the federal government's goal of bringing it down to 2%. But that could get the government to start cutting interest rates in September.
"I think the fed just wants a couple more months to prove that the inflation rate continues to drift lower," CBS News business analyst Jill Schlesinger said.
Dropping interest rates can lower borrowing costs on credit cards, car loans and mortgages, which could help the nation's housing market heat up again.
Sacramento resident Jadell Lee said that until interest rates drop, he will think differently about what he charges on his credit cards.
"I have nine credit cards," Lee said. "I'm over $30,000 in credit debt."
As he pondered what would happen with interest rates during the next several weeks, Lee admitted that he has started to think more intelligently about spending money.
"It's making me more conscientious about how I allocate my money and where I'm spending it," he said.
Some financial experts think the federal government could cut interest rates as many as three times between now and the end of the year, but it could also lower the amount of interest consumers earn on their savings accounts.
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