US Banks Follow Fed's Lead, Raise Prime Lending Rates

The US Federal Reserve's recent interest rate hike has led to an increase in prime lending rates by major banks. JPMorgan Chase, Bank of America, and Citigroup have all raised their prime lending rate by a quarter point, from 6.75% to 7%. This move is expected to make borrowing more expensive for consumers, particularly those seeking loans for large purchases such as homes or vehicles.

The hike in interest rates also means that credit card holders can expect higher interest charges on their outstanding balances. The Federal Reserve's decision to raise the Fed Funds Rate by 25 basis points has been followed by commercial banks, who typically adjust their lending rates in sync with the central bank's moves.

With inflation running above 3%, the Federal Reserve has signaled that another rate hike is likely this year. Goldman Sachs has revised its interest rate expectations, predicting a further 25-basis point increase at the next Fed meeting on October 28.