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This is an excerpt from Dollar Scholar, the Money newsletter where news editor Julia Glum teaches you the modern money lessons you NEED to know. Don't miss the next issue! Sign up at money.com/subscribe and join our community of 160,000+ Scholars.
You know that moment when you’re riding a roller coaster that’s just reached the top of the first drop and you’re paused there, teetering? You’re anxious and excited. You can see the downward swoop of the track ahead but you don’t know what to expect: when you’ll finally lurch forward, how terrifying it’ll be... or whether you’re going to throw up?
That’s where we are with the Federal Reserve right now.
The U.S. central banking system has been raising rates for over a year, taking the federal funds rate from 0 to 0.25% at the start of March 2022 to a target range of 5 to 5.25% last month. The 10 consecutive rate hikes have all been in hopes of curbing inflation — and soon, they may taper off.
The nation's record-high inflation has been slowly abating, and the recent bank drama has helped to cool down the economy a bit. But I’ve become accustomed to living in a high-interest-rate environment. And now that I’m peering over the edge, I’m getting worried.
