The Fed Just Raised Interest Rates. Here’s What That Means for Your Wallet.

The Federal Reserve has raised its benchmark interest rate again — Wednesday’s increase was the fourth this year — and consumers can expect to feel it, one way or another.

Whether you will cheer or chafe at the increase depends, broadly, on whether you’re a saver or a spender. Savers and retirees seeking juicier yields will have an easier time finding savings accounts that pay more than 2 percent, a figure that looks attractive after they were starved of any interest for nearly a decade. But people trying to whittle down a pile of credit card debt, tap their home equity line of credit or purchase a car may find that it will cost a little more.

All these changes are a result of the Fed’s gradual increase in the federal funds rate, which is the interest rate banks and depository institutions charge one another for overnight loans. The rate influences how banks and other lenders price certain loans and savings vehicles — and it can have broader impact on our financial lives.

The Fed raised short-term rates by a quarter of a percentage point to a range of 2.25 to 2.5 percent, which was the ninth increase since the end of 2015. That’s still low from a historical standpoint, but it’s the highest that rates have climbed since the financial crisis a decade ago. Indeed, the latest quarter-point bump is no different than previous increases, but consumers may be beginning to feel the cumulative effect in a more pronounced way.

Fed Raises Interest Rates,

Keep reading this article on The New York Times Your Money.