How a Fed increase could affect credit card debt, auto loans
If, as expected, the Federal Reserve raises interest rates yet again in its drive to cool inflation, much of America will be directly affected
By CORA LEWIS and ADRIANA MORGA
Published - May 03, 2023, 11:18 AM ET
Last Updated - Jun 21, 2023, 11:24 PM EDT
NEW YORK (AP) — If, as expected, the Federal Reserve raises interest rates yet again Wednesday in its drive to cool inflation, much of America will be directly affected.
Rates on credit cards, mortgages and auto loans, which have been surging since the Fed began raising rates last year, all stand to rise even more. The result will be more burdensome loan costs for both consumers and businesses.
On the other hand, many banks are now offering higher rates on savings accounts, giving savers the opportunity to earn more interest.
Economists worry, though, about whether the Fed’s streak of 10 rate hikes since March 2022 will eventually cause the economy to slow too much and cause a recession.
