Credit card, mortgage and auto: See how Fed interest rates have affected how much you pay
The Federal Reserve started boosting interest rates in March 2022 to rein in 40-year high inflation, which has fallen from a high of 9.1% to 3% in its most recent reading.
Initial signs suggest that the 11 rate increases have slowed inflation and the economy by making borrowing more expensive for businesses and consumers.
The most immediate signs came in housing. Existing home sales tumbled throughout 2022, falling from seasonally adjusted annual rate of 6.5 million in January 2022 to 4.2 million in June of this year.
Fed rate hike live updates: Interest rates expected to rise again to further cool inflation
Inflation? Recession?: How Fed rate hikes and economy's outlook compares with soft landings of past
With the Federal Reserve's policymaking committee's decision today, the fed funds rate is another 0.25 percentage points higher – a change that will ripple through the economy and likely make borrowing even more expensive.
How much interest rates have jumped
Carrying debt on a credit card gets more expensive
As the prime rate has risen to 8.25% (and will likely rise to 8.5%), the average credit card interest rate has risen from 14.6% in February 2022 to 24.2% last week, according to LendingTree. That's raised monthly interest charges to $140 – about a $55 increase – on the average American's $6,965 credit card balance.
Mortgages get more expensive
Fed Chairman Jerome Powell continues to say we shouldn't expect a reduction in interest rates soon. Many economists and investors predicted the fed funds rates would rise another 0.25% when the Federal Reserve concluded its meeting on Wednesday.
That could continue the housing market's troubling direction — pulled down by higher mortgage rates in 2022. Mortgage rates have actually fallen a bit since nearly hitting 7% early in July.
That still leaves new home owners facing steeper mortgage costs than they were last year.
The median U.S. home sold for about $450,000 in 2022, according to the Census Bureau. In the past year, Freddie Mac's reported 30-year mortgage rates have risen from 3.6% to 6.78%, increasing the monthly payment on a $450,000 home by more than $700, according to a Bankrate calculator.