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Federal Reserve decisions may impact Michigan's car and mortgage industries

Posted at 8:28 PM, Mar 15, 2022
and last updated 2022-03-15 20:28:41-04

PONTIAC, Mich. (WXYZ)  — The Federal Reserve is meeting this week and is expected to increase interest rates.

As officials discuss economics, it is not all bad news. The Federal Reserve’s first job is to help maximize employment. The Bureau of Labor Statistics reported a relatively low 3.8 % unemployment in February.

The Federal Reserve’s other goal of stable prices is the problem everyone WXYZ spoke to at Kerby’s Coney Island in Southfield has noticed.

“Prices are inching up,” said Anthony Torres.

“Everything from groceries to gas, is costing more,” said Sally Thomas.

“Toilet paper is through the roof. I even went out and bought a bidet,” said Renee Major.

During the meetings underway,  Federal Reserve officials will share where they think interest rates should be to slow inflation and will create a dot plot.  We decided to crowdsource our own with the people we interviewed. They all think interest rates need to increase. 

The Federal Reserve has suggested rates will go up about .25 percent in March. It has the potential to impact two industries that employ tens of thousands in metro Detroit by changing the cost of car loans and mortgages. 

“We’re proud to be here. We’re in Pontiac Michigan. We have over two million square feet of space here,” said Mat Ishbia, President and CEO of United Wholesale Mortgage, which employs almost 9,000 people in Michigan.

Ishbia says mortgage rates already changed based on expectations of what the Fed will do.

“Refinancing just to lower your payment, I won’t say it is dead, but it is dying slowly right now. Cash-out refinancing is still hot. And purchasing is still game,” said Ishbia.

If you are looking to buy in the near future, what the Federal Reserve announces Wednesday afternoon after its meetings could lead to a window of opportunity.

“Just because the Fed is raising rates, it doesn’t mean it is going to go up or the next day. There is a good chance rates actually go down tomorrow,” said Ishbia.