: How the Fed’s latest interest-rate hike affects your mortgage, car loan and credit-card bill — but there’s good news for your savings

by | Dec 16, 2022 | Stock Market

After quickly ratcheting up interest rates to combat red-hot inflation, the Federal Reserve is not suggesting that rates will drop any time soon. On Wednesday, the central bank raised the benchmark interest rate again. This time, as Wall Street had anticipated, it upped the key rate by 50 basis points. That follows four, 75-basis point hikes and marks the seventh rate increase this year from a starting point near zero.

This brings the federal funds rate up to 4.25%-4.5%, the highest level since 2007. Fed officials also penciled futures increases to bring the rate’s top end to 5.25%. The latest hike may be slightly lower this time around, but it’s in keeping with a central bank view that interest rates will have to stay higher for longer to quell inflation. Thus far, it appears to be working: On Tuesday, November inflation data came in at 7.1% in November, down from 7.7% in October, cooler than expected. In a statement on Wednesday, the Fed said “ongoing increases would be appropriate.” Federal Reserve Chairman Jerome Powell said, “We’ve covered a lot of ground, and the full effects of our rapid tightening so far are yet to be felt. Even so, we have more work to do.” So what’s the view from …

Article Attribution | Read More at Article Source

Share This