The Fed is set to boost rates again. Here’s the impact on your finances – By Aimee Picchi (Moneywatch) / Nov 1, 2022
The Federal Reserve on Wednesday will once again turn to its fiercest weapon to battle the hottest inflation in 40 years, with the central bank set to boost rates for a sixth time in 2022. The cost of borrowing money will yet again become more expensive for consumers and businesses, creating an economic pinch that could have a major impact on your finances.
The Federal Reserve is expected to boost its benchmark interest rate by 0.75 percentage points on Wednesday, marking its fourth consecutive hike of that size this year, according to economists surveyed by FactSet.
Earlier in 2022, the central bank had nudged rates higher by smaller amounts — 0.25 and 0.5 percentage points — but with inflation remaining stubbornly sticky, the Fed is turning to bigger hikes to tame runaway prices. The impact on Americans has been broadly felt, especially at a time when inflation remains high. Mortgages have topped 7% for the first time in two decades, while credit card rates are rising sharply.
“Unsurprisingly, it’s a lot more expensive to borrow than it was even six months ago, and certainly a year ago,” Matt Schulz, chief credit analyst at LendingTree, told CBS MoneyWatch. “When you combine that with seemingly everything getting more expensive on a daily or weekly basis, it’s been a really tough year on consumers.”
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