With inflation at a 40-year high, how much will the Fed raise interest rates, how will it affect you?

EL PASO, Texas -- The Federal Reserve will discuss raising the interest rate during a Tuesday meeting as the nation deals with the highest inflation rate in 40 years.

To cool down inflation, the Fed plans on raising interest rates to slow down the economy and lower prices, but the question is how high the increase will be.

Tom Fullerton, professor of economics and finance at UTEP, forecasts the interest rate will raise 0.75 percent after the Fed's meeting this week. This will affect short-term loans, Fullerton says, like on credit card and student loans.

Brian Mirau, owner of Mirau Capital Management, explains, “The impact on credit card rates is going to hit fast. Most credit cards have a variable rate, so anyone carrying a balance, get ready to shell out some more just to cover the interest rates."

Both Fullerton and Mirau suggest paying off debts now and to avoid earning any debt as interest rates rise. The Fed is expected to keep on raising the interest rates until inflation goes down, but this has some worried the Fed's actions will throw the nation into a recession.

Fullerton says households should be careful in taking on additional debt in case the labor market turns south. 

“All of the good job prospects and bonus payments, and wage increases that a lot of people have been observing in recent months, that’s going to vanish," Fullerton explained.