The Federal Reserve announced Wednesday that it will increase its benchmark interest rate by 0.75%, matching the largest increase in decades. Here's what that means for everyday Americans.
With inflation still sky-high, the Federal Reserve announced Wednesday it would raise interest rates by 0.75%, the largest increase since the 1990s. On Wednesday,, the second hike of this magnitude in just two months by the U.S. central bank in its quest to rein in
"It is essential that we bring inflation down to our 2% goal if we are to have a sustained period of strong labor market conditions that benefit all," said Federal Reserve chairman Jerome Powell at a press conference Wednesday. With inflation so bad right now, mortgage rates rose throughout the spring and have stayed high into the summer.
Now, homes are starting to sit on the market longer, and more sellers are cutting prices to find buyers. Builders started fewer homes in June than they did in May. Ever since the pandemic began and the Fed dropped interest rates, the average interest rate for a typical savings account hovered around 0.06%,Now, with the Fed's benchmark rate rising, interest rates are ticking up, too. Some banks, especially internet banks, are starting to offer interest rates on savings accounts of 1% or more.
But for people who need savings to be accessible without the risk of a stock market drop – like emergency funds or a down payment for a new home or car – 1% is better than nothing., also are offering higher returns than in past years.Losers, most likely: All of us, in the short term
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