Another Fed rate hike; advice for Mega Millions winners

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Good morning and happy Wednesday, Daily Money readers. It’s Jayme Deerwester back with you.

A few hours from now, the Federal Reserve is expected to announce it’s raising interest rates by another three-quarters of a point – or 75 basis points.  If this sounds like déjà vu, it’s because it did the same thing in June after consumer inflation accelerated to 9.1%. Some economists believe a full point raise isn’t out of the question given that inflation jumped in nearly every category.

Wednesday’s anticipated rate hike may not be the end of it, either:  The Fed’s generally expected to increase rates at every meeting for the rest of this year to get inflation closer to its 2% target. 

The good news is that future hikes may get smaller. ING chief international economist James Knightley expects only 50-basis-point increases in September and November with a final quarter point in December.

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