Policymakers at the Federal Reserve will announce their latest decision on interest rates on Wednesday, after a series of increases squeezed the budgets of debt-laden Americans and rewarded those with money to stash in savings.
The Federal Reserve has raised its benchmark rate, the federal funds rate, to a range of 5.25 to 5.5 percent to rein in inflation, which recently sped up as gas prices rose. Prices remain elevated, leading the Fed to keep rates high for a prolonged period of time.
That means the cost of credit cards and mortgages may remain relatively high, 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.
Borrowers will start making repayments on student loans in a couple of weeks
