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On August 10, the U.S. Federal Reserve raised interest rates by a quarter of a percentage point for the second time in two months. The initial rate increase announced by the Fed in late June marked the first time since 2000 that rates actually went up, after hitting a historic low of 1 percent. The Fed is citing growth in the economy as its reason for the moves, which it expects to continue as it seeks to keep inflation under control. A statement from the board said, In recent months, output growth has moderated and the pace of improvement in labor-market conditions has slowed. This softness likely owes importantly to the substantial rise in energy prices. The economy nevertheless appears poised to resume a stronger pace of expansion going forward.

Since a number of economists are expressing skepticism about the Fed's sanguine outlook, which seems to downplay recent weak consumer spending and job-creation indicators, there is a belief that the focus needs to be on whether consumer spending lagged simply because of fuel costs, or whether people are finally hunkering down for a longer, tougher patch in the economy. Realistically, federal interest rates, even at their present level of 1.50 percent, are the lowest they've been since 1961. Since 2000, when the Fed started its series of 13 consecutive rate reductions from 6.5 percent, consumers spent their way through the recession, with record home sales and new home starts, as well as strong retail spending to boot, apparently undaunted by debt since funds were so cheap. Even as the Fed announced plans to continue raising rates, we thought it would be timely to test the pulse and nerve of consumers on their spending plans. We teamed up with Harris Interactive to investigate whether Americans are in a borrow-low, save-high mode, possibly accelerating some big-ticket purchases they may have delayed making as interest rates dropped.

The survey was fielded on July 14, before the second rate increase was announced, and included 2,320 participants. As a whole, respondents reflected a more cautious approach to expensive outlays. Only 10 percent said they planned to take advantage of low financing costs still in effect. Almost 1 in 5 young families respondents who have a child under the age of 6 indicated a greater likelihood of making a big-ticket move before rates climb. Naturally, they're the demographic most apt to be in the market for a new home or car. By contrast, 85 percent of those over the age of 55 said they had no plans for a big purchase in the near future.

What's more, when we asked if they planned to cut back on debt particularly on credit cards so they would not be forced to pay higher fees on the borrowed money, the answer was a resounding Yes. More than half 53 percent of the responses were in this category. Older respondents led the way in affirming these plans, and 65 percent of respondents with incomes of $50,000 to $75,000 said they hoped to get rid of at least part of their debt loads. Also, those who have a child between the ages of 6 and 12 also plan to pay down debt, with 61 percent saying they intended to do just that.

People may have financial pressures or uncertainties that prevent them from taking advantage of continued low financing cost for some of their once-in-a-lifetime purchases. And, they seem to be increasingly fearful of the wrath of the credit card companies. Financial planning may not be the strong suit of most U.S. consumers, but getting into debt, and living and learning to regret it seems to be the American way.

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