The Federal Reserve has raised interest rates by a quarter of a percentage point, a move that will affect consumer borrowing and savings costs including mortgages, credit cards, auto loans and deposit rates, according to CNBC.
Key facts
- The Federal Reserve raised interest rates by a quarter of a percentage point.
- The hike affects mortgages, credit cards, car loans and deposit rates.
- The change impacts both borrowing costs and savings returns for consumers.
- Coverage is based on reporting by CNBC.
The Federal Reserve has raised its benchmark interest rate by a quarter of a percentage point, a decision that will filter through to a wide range of everyday financial products, according to CNBC.
The change is set to affect consumer borrowing costs across several categories. CNBC reports that mortgages, credit cards and car loans are among the products whose costs will be influenced by the Fed’s move.
On the savings side, deposit rates are also expected to shift as a result of the decision, meaning the change touches both what consumers pay to borrow and what they earn on money they set aside.
Because the Fed’s benchmark rate serves as a reference point for many lending and deposit products, adjustments to it tend to spread through the broader economy, shaping the terms households encounter when they take out loans or open savings accounts.
CNBC framed the quarter-point increase in terms of its practical effect on consumers, highlighting mortgages, credit cards, car loans and deposit rates as the key areas where the impact will be felt.
Why it matters
Changes to the Fed's benchmark rate directly affect how much households pay on loans and credit cards and how much they earn on savings. Even a quarter-point move can add up over time across mortgages, auto loans and deposit accounts, making the decision relevant to nearly every consumer.
Frequently asked questions
How much did the Fed raise interest rates?
According to CNBC, the Federal Reserve raised interest rates by a quarter of a percentage point.
Which consumer products are affected by the rate hike?
CNBC reports the hike will impact mortgages, credit cards, car loans and deposit rates.
Does the rate change affect savings as well as borrowing?
Yes. CNBC notes the move affects deposit rates, meaning it influences both borrowing costs and savings returns.