6 Ways Fed Rate Hikes Affect Your Wallet

After increasing the benchmark interest rate twice in 2018, the Federal Reserve telegraphed its intention to raise interest rates twice more this year. If the Fed follows through, it will deliver four full quarter-point rate increases this year, bringing the federal funds rate up to 2.5% from the current level of 2.0%.

Rate increases affect more than just the rate at which banks lend to one another overnight. The benchmark rate ultimately affects the entire financial system, from banks to insurance companies. Let’s look at the six ways the Federal Reserve can impact your wallet by increasing or decreasing the overnight interest rate.

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