Fed Rate Hike Hits Borrowers Hard, Savers Gain

The Federal Reserve raised interest rates for the first time since 2023 to combat inflation. The impact will depend on whether individuals are borrowing money or saving it, according to financial expert Barry Bigelow.

Bigelow notes that higher interest rates make borrowing more expensive and reduce the profitability of lending. On the other hand, savers can expect higher returns as banks may offer increased interest rates on savings products like certificates of deposit.

Credit card holders with balances may feel the effects first due to the close tie between credit card rates and the Fed's decisions. Homeowners with variable rate mortgages or home equity lines of credit could also face higher costs.