What the Fed's Latest Interest Rate Hike Means for Mortgage Rates, Credit Cards and More
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Inflation just won't cool down — and it's putting pressure on the Federal Reserve to continue making big moves in its battle against rising prices.
The U.S. central bank announced Wednesday that it is hiking interest rates by 0.75%. It's the fourth increase in five months: The Fed raised rates by 0.25% in March, 0.5% in May and 0.75% in June. July's rate hike brings the target range for the federal funds rate to 2.25%-2.5%.
In a news release, the Federal Open Market Committee — which decides on the interest rate adjustments — said recent indicators of spending and production have softened, but job gains have been robust and the unemployment rate remains low. This is significantly different language than the Fed used in June, when it said that overall economic activity appeared to have picked up.
Consumer prices jumped 9.1% in the 12 months ending in June, which is the largest increase since 1981, according to data from the Labor Department. You've likely felt the impact of surging costs at the gas station, grocery store and, well, nearly everywhere else you shop. Despite economists and consumers hoping the inflation rate will fall, prices keep climbing higher.
