- The Fed is set to raise interest rates for the sixth time this year on Wednesday.
- The rise will make it more expensive for consumers and businesses to borrow money.
- The central bank is raising rates to curb inflation, which is approaching a 40-year high. But rising rates risk plunging the economy into a recession.
Federal Reserve set to raise interest rates on Wednesday for the sixth time this year. This increase will have a direct impact on consumers’ wallets, making it even more expensive for them to obtain a mortgage and pay off credit card debt.
The central bank is raising rates to curb inflation, which is approaching a 40-year high. The September Consumer Price Index report showed annual inflation dipping slightly to 8.2% but rising 0.4% on a monthly basis, beating economists’ expectations.
The Fed is facing growing calls from lawmakers as well as the United Nations to stop raising rates, fearing it could trigger a painful recession. But he did not signal that he would hit the pause button soon as he aims to bring inflation closer to his 2% target, even if that leads to job losses.
For now, at least, the labor market remains strong. Job vacancies are plentiful and the unemployment rate is remarkably low. But economists don’t expect that to be the case in 2023, especially if the Fed continues to raise rates at an aggressive pace. If today’s rise occurs as expected – 75 basis points – it would mark the fourth consecutive rise at this intense level.
Follow our coverage of today’s crucial interest rate decision.
How will stocks react to the Fed? :Here’s how the stock market fared with the Fed’s 5 interest rate hikes
I Bond rates:Why I chose I Bonds to protect my sons’ inheritance from high inflation for 40 years
What time is the Fed’s rate hike decision?
The Fed’s decision will be released Wednesday at 2 p.m. ET
What time is Powell’s press conference?
Fed Chairman Jerome Powell’s press conference begins Wednesday at 2:30 p.m. ET. USA TODAY business reporter Paul Davidson will cover the event in person.
What does it mean when the Fed raises interest rates?
When the Fed raises interest rates, it becomes more expensive for banks to borrow money from each other. Banks pass these higher rates on to consumers by making it more expensive for them to get a mortgage, loan, pay off credit card debt and more.
On the other hand, Fed rate hikes increase the interest you earn on money in a savings account.
What is Inflation? :Understand why prices are rising, what causes it and who it hurts the most.
What is a recession? :The economic concept explained and what happens during a.
Dow Jones Futures and 2-Year Treasury Bill
Futures on the Dow Jones Industrial Average and the S&P 500 index fell slightly around 8:30 a.m. ET. Yields on 2-year Treasury bills were slightly higher, around 4.54%.
— Elisabeth Buchwald