Today, Wednesday, the Federal Reserve did something it hadn’t done in 28 years. It announced an increase in interest rates by three-quarters of a percentage point.
In response to rising inflation and volatile financial markets, the Federal Open Market Committee chaired by Federal Reserve Chairman Jerome Powell decided to increase the rate that banks charge each other to borrow overnight to a range of 1.5 percent-1.75 percent, which it has not been since before the Covid pandemic crisis began.
This rate feeds into consumer borrowing, affecting virtually all adjustable-rate products such as credit cards and home purchase loans.
