Fed Rate Hike: Life Just Got More Expensive for Households
The Federal Reserve's decision to raise interest rates by a quarter percentage point to 3.75-4% has sent shockwaves through the economy, making life more expensive for households already burdened with a record $18.8 trillion in debt.
The rate hike is expected to impact everything from student loans to mortgage rates, as banks charge higher interest rates due to increased borrowing costs.
Auto loan and credit card rates are set to jump first, with payments climbing by a few dollars on average, adding strain to households already struggling financially.
While some argue that higher rates can lift yields on savings and certificates of deposit (CDs), making savers 'finally get paid something for holding safe assets', the housing market is expected to suffer as mortgage rates climb towards 7% for the first time since last year.