After raising interest rates 10 times over the past 15 months, the Federal Reserve is expected to take a break on Wednesday and hold rates steady. But the cumulative effects of past rate increases will continue to squeeze the budgets of debt-laden Americans, while rewarding those with money to stash in savings.
The Federal Reserve has already raised its benchmark rate, the federal funds rate, to a range of 5 to 5.25 percent to rein in inflation, which is showing signs of slowing. But prices remains elevated — and the Fed could decide to lift rates again as soon as next month.
That means the cost of credit cards and mortgages may continue to climb, making it more difficult for people who want to pay down debt — as well as those who want to take out new loans to renovate their kitchen or buy a new car.
“We were very spoiled for a while with low rates, and that lulled us into a false sense of security in terms of what the true cost of debt can be,” said Anna N’Jie-Konte, president of Re-Envision Wealth, a wealth management firm.
What Higher Interest Rates Mean for Mortgages, Credit Cards and More
