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Another Interest Rate Hike Is Coming From The Federal Reserve: Here’s How It Could Affect You (Video)

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 By Jessica Dickler

This week, the Federal Reserve will likely raise rates by another three-quarters of a percentage point for the third consecutive time in an effort to cool down the high cost of living.

The U.S. central bank has already raised interest rates four times this year, for a total of 2.25 percentage points.

Fed officials have “declared inflation as ‘public enemy No. 1,’” said Mark Hamrick, senior economic analyst at Bankrate.com.

“They want to take their benchmark rate into restrictive territory and hold it there for longer awaiting what Chairman Jerome Powell has said must be ‘compelling evidence that inflation is moving down,’” he said. “We remain far from that destination.”

The federal funds rate, which is set by the central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the rates consumers see every day on things such as private student loans and credit cards.

The upcoming rate hike will correspond with a rise in the prime rate and immediately send financing costs higher for many types of consumer loans.

“Any time consumers borrow, they are dependent on interest rates,” whether that’s for “housing, cars or appliances,” said Tomas Philipson, a professor of public policy studies at the University of Chicago and former acting chair of the White House Council of Economic Advisers.

What a rate hike could mean for you

Here’s a breakdown of some of the major ways a rate increase could impact you, in terms of how it may affect your credit card, car loan, mortgage, student debt and savings deposits.

CNBC, excerpt posted on SouthFloridaReporter.comSept. 19, 2022

This article originally appeared here and was republished with permission.

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