WASHINGTON, D.C.– The Federal Reserve raised interest rates Wednesday afternoon for the third time this fiscal year. The Federal Open Market Committee agreed to raise its benchmark borrowing rate by one-quarter of one percentage point, to a range of between 1.0 and 1.25 percent.
So what does that mean, and how does it impact YOU?
When interest rates go up, borrowing costs go up too, and investors become less interested in putting their money in the stock market.
The good news: if you save more money, you’ll earn more money.
It’s still okay to buy a house. Business analysts say mortgage rates likely won’t go up because long-term mortgages aren’t tied directly to the federal interest rate.
If you’re taking out a student loan this year, it could hurt you. Federal lending rates are locked in at the time the loan is taken out, so current students are okay. But it’s students looking to borrow this year who will see an increase in their payments.
Economists project at least one more interest rate hike this year, but they aren’t sure exactly when it will happen. Right now, they say December is the biggest bet.