The Fed Just Hiked Interest Rates…What Does it Mean to You??

If you’ve ever borrowed money or opened a savings account, then the Federal Reserve matters to you.

As was widely expected, the US central bank just decided to raise its benchmark interest rateto a target of 0.75% to 1% at this week’s meeting, and it has signaled that more rate hikes are to come.

That rate, called the fed funds rate, serves as a benchmark for basically every interest rate in the US: government borrowing rates, mortgage rates, credit-card rates, savings-account yields, and so on.

The Fed uses it as a way to accelerate, or slow, economic growth. The rate is rising because the job market is relatively strong and the central bank doesn’t want prices rising too fast. Making it costlier to borrow will eventually slow spending by companies and consumers alike.

So, even if you’re not a titan of finance, the Fed’s interest-rate decision could still affect you if you’re planning to buy a house or save for retirement.

                                                                                                                                                           published by Rueters: AndyKlersz

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