ROCKFORD, Ill. (WTVO) — The Federal Reserve took another step to address the highest inflation surge in four decades.

It will affect the costs of auto loans and other things that people borrow money for. It is the largest hike since 1994, but one expert said that by itself, the unusually large increase will not hit residents’ pockets as hard as they think.

“Anytime something happens in the economy, you’re going to see a mortgage rate move,” said Pam Desanti, vice president of mortgage lending at Midwest Community Bank.

Wednesday’s interest rate is not the first and it will not be the last, according to Desanti. She said that the three-quarter point raise is in effort to fight inflation.

“By changing the fed rate and by increasing that, it is meant to perhaps slow the consumer spending to get the prices in check,” Desanti said.

The hope is that by making it more expensive to borrow money, the demand for things like homes will decline. Desanti said, however, that the fed’s rate increase has no direct correlation to mortgage rates, but the market does watch and adjust based off of predictions.

This can cause first-time home buyers to readjust their budget.

“The challenge becomes what they thought they could afford, to what they now can afford, is a big difference. You have to get comfortable with the payment, the rate, those change all the time,“ Desanti said. “This 3% jump over the last few months, impacts people by $60-70,000 in what they can buy.”

How much a person can afford does impact buying power, according to Desanti. Rockford is the place to be cost effective.

“We’re very affordable here,” Desanti said. “What someone can get for $150,000 here is triple or quadruple in other parts of the country, so sustaining affordability, I think we’ll be fine with that.”

The Federal Reserve said that they will keep a close eye on the changes, and they are not afraid to raise rates again in July if need be.