On Wednesday, the Federal Reserve increased the prime interest rate by another ¼ percent. That may not sound like much but it can add up to hundreds to thousands of dollars out of your pocket. One of the first impacts of an interest rate increase is that mortgage and many lending rates will also go up, generally by more than just a mere ¼ percent. Borrowing money anywhere will cost more. Here are some additional impacts to your personal finances.
Consumers are facing headwinds as the Federal Reserve is expected to continue its pace of rate hikes, starting with an anticipated increase at its Wednesday meeting.
With the interest rising on variable rate loans, consumers who have large amounts of debt will see their borrowing costs rise.
The Fed is expected to increase rates by a quarter point, the fourth hike since the central bankers began raising rates in December 2015, said Greg McBride, chief financial analyst for Bankrate, a New York-based financial data and content company….
One of the few upsides is that banks might, let me emphasize MIGHT, raise the interest rates they pay on savings, CDs, bonds and certificates. However, those increases are never guaranteed, but increases at the stores on many products will creep into your bank account and take out more money than they used to. With the economy at a small lull, one has wonder why the Fed raised the rate, other than Yellen is a Democrat and believes that raising the rate will hurt the economy and Trump.