The Daily Money: Fed likely to hike interest rates again. What it means for you.
Good morning, Daily Money readers. It’s Bailey Schulz here to bring you the day’s top stories.
The Federal Reserve is expected to raise its key short-term interest rate one more time this year with a 25 basis point hike to help curb inflation. The Fed will reveal its decision at 2 p.m.
Even though this may be the central bank’s final rate bump of the year, it could carry consequences for consumers.
How the Fed's rate hike could affect you
Climbing interest rates have already tested some borrowers’ ability to repay their debts. Another quarter-point hike would cost consumers an additional $1.7 billion over the next 12 months, bringing the annual cost of the Fed’s recent rate hikes to a total of more than $33 billion, WalletHub estimates.
The average APR on a new credit card offer – already its highest in decades at 23.84% – is expected to go even higher if interest rates are raised, making it harder to pay off credit card debt.
But there's good news for homebuyers. Since this week's hike is expected, it should not impact mortgage rates. Confirmation of a pause could actually lead to some mortgage rate relief.
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🍔 Today's Menu 🍔
On today’s menu: a specialty Ethiopian coffee from The Weeknd.
The musician and son of Ethiopian immigrants has partnered with Blue Bottle Coffee on Samra Origins, a new brand of coffee products named after The Weeknd's mother. The brand, which honors his Ethiopian roots and the culture of the country long considered the birthplace of coffee, debuts on May 9.
About The Daily Money
Each weekday, The Daily Money delivers the best consumer news from Paste BN. We break down financial news and provide the TLDR version: how decisions by the Federal Reserve, government and companies impact you.