How brides and grooms are impacted by the latest Federal Reserve interest rate hike

PHILADELPHIA (WPVI) -- After a brief pause in June, the Federal Reserve raised interest rates another quarter of a percentage point on Wednesday.

The decision comes as inflation continues to impact every sector, including the wedding industry, as 77% of couples tie the knot during the summer months.

Wednesday's announcement marks the 11th rate hike in the past 12 meetings and it should inform how you handle your money.

The Feds' goal is to get down to 2%, but right now, inflation is hopscotching between 4.6% and 4.7%.

It's having an impact on all consumers, including brides-to-be.

"A lot of those discretionary purchases have also come under pretty significant price pressure over the last year or so," said Chief Financial Analyst Greg McBride of Bankrate.

For example, fresh cakes and cupcakes are up 7.8% from June 2022 to June 2023. Alcoholic beverages are up 4.4%, wine is up 6.7%, and photographers and photo processing are up 4.8%.

According to wedding planning site, Zola, the average cost of a wedding hit $29,000 in 2023, forcing many couples to trim their guest list.

The Knot says 39% are cutting the number of attendees.

This is also having an impact on festivities before the big day. Trustpilot, an online review platform, did a survey of bachelor and bachelorette parties.

"In light of inflation, we know that about 40% of Americans are really frustrated with the cost of these bachelor and bachelorette party celebrations, especially with the cost of travel," said Dana Bodine of Trustpilot.

So with all this in mind, will the Feds say "I do" to another rate hike at its next meeting, or will Wednesday's be the last?

"Whether we see more rate increases in the months ahead is going to largely depend on what we see from economic data, the job market, and inflation in particular," said McBride.

And even once the Fed stops raising interest rates, rates are going to stay high for quite a while.

"So continue to diligently pay down your high-cost debt, in particular credit card debt. The average rate is over 20%. It's going to go up again, following the Fed's move," said McBride.

Prioritizing paying down that high-cost variable-rate debt is important. That remains your number one exposure right now.