Fed Rate Hike: Borrowing Costs Rise, Savings Rates May Follow

The Federal Reserve raised interest rates for the first time in two years, and consumers are already feeling the effects. Financial planner Jackie Cummings Koski explains that when the Fed raises rates, banks typically pass those costs along to consumers.

This means borrowing money gets more expensive, but existing fixed-rate loans remain unaffected. If you're planning to borrow soon, it might be smart to act sooner rather than later due to another rate hike expected before the end of the year.

On the other hand, higher rates can boost returns on high-yield savings accounts, although banks aren't required to pass increases along. Jackie's own high-yield savings account could climb from 3.5% to around 3.6% following this hike.