In short, it’s about to be costlier to borrow but those who have money to save will earn more interest on it. Here’s a breakdown explaining:
The Fed's goal is to slow consumer spending, thereby reducing demand for homes, cars and other goods and services, eventually cooling the economy and lowering prices.
“I’m not sure interest rates are top of mind for most consumers right now,” Hoyt said. “They seem more worried about groceries and what’s going on at the gas pump. Rates can be something tricky for consumers to wrap their minds around.”Even before the Fed’s latest move, credit card borrowing rates had reached their highest level since 1996, according to Bankrate.com, and these will likely continue to rise.
As rates have risen, zero percent loans marketed as “Buy Now, Pay Later” have also become popular with consumers. But longer-term loans of more than four payments that these companies offer are subject to the same increased borrowing rates as credit cards. Mortgage rates don’t always move in tandem with the Fed's benchmark rate. They instead tend to track the yield on the 10-year Treasury note.
“I think we’re actually starting to see that these interest rates, they’re doing what the Fed wants,” Drury said. “They’re taking away the buying power so that you can’t buy a vehicle anymore. There’s going to be fewer people that can afford it.”
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Euro (EUR/USD) Latest - Braced For a Fed and ECB Double-HeaderA busy 24 hours ahead with the latest FOMC rate decision this evening while the ECB announces its updated policy decision tomorrow. Both have accompanying press conferences that need to be followed closely.
Read more »
STOCK MARKET NEWS: Fed hikes rates, Powell talks inflation, Delta’s rosy outlook, FTX latestFederal Reserve meeting, Delta's rosy outlook, FTX fallout continues for crypto and Sam Bankman-Fried. FOX Business is providing real-time updates on the markets, commodities and all the most active stocks on the move.
Read more »
Bond king Gundlach says the Fed should not do more rate hikes after the latest increaseDoubleLine Capital CEO Jeffrey Gundlach said the central bank will be 'highly encouraged' by the inflation data in the next six months.
Read more »
Forex Today: ECB, BoE, SNB All Expected to Hike by 0.50%Today's Forex news: 3 European Central Banks Expected to Raise Rates Today; Fed Hikes Rates by 0.50%; Fed Sees Rates Above 5% in 2023, Powell: Fed Has “Ways to Go”;
Read more »
Opinion | Inflation Isn’t Vanquished YetFrom WSJopinion: Price increases are slowing, but the Federal Reserve still has work to do to beat inflation
Read more »
Bitcoin falls below $18,000 after Federal Reserve raises interest ratesBitcoin loses ground as the Fed delivers a rate hike and signals more to come.
Read more »