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Federal Reserve Chair Kevin Warsh held a news conference Wednesday afternoon shortly after it was announced they would be raising their key interest rate for the first time since 2023. WASHINGTON - The Federal Reserve has increased the cost of borrowing, creating challenges for borrowers while offering potential benefits to savers. On Wednesday, the central bank raised its benchmark interest rate by a quarter-point, marking its first increase since summer 2023. The move is expected to make loans for homes, vehicles and other major purchases more expensive, while people with savings could see slightly higher returns. The rate hike brings the Fed’s target range to 3.75% to 4.00%.
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Credit card interest rates had already reached their highest level since 1996 before the Fed’s latest move, according to Bankrate.com. Higher interest rates have pushed returns on high-yield savings accounts and certificates of deposit to levels not seen since 2009. Bonds and other fixed-income investments may also offer better returns.
