--- title: What the Fed's Latest Interest Rate Hike Means for Mortgage Rates, Credit Cards and More description: The Federal Reserve has announced it's hiking interest rates by 0.75% in hopes of curbing inflation — its fourth increase in four months. authors: - name: Mallika Mitra role: Contributing Editor url: https://money.com/author/mallika-mitra/ bio: Mallika Mitra is a contributing editor for Money, based in Chicago. She has covered investing and retirement for seven years and her work has appeared in CNBC, Bloomberg, Kiplinger, AARP, Barron’s, Bankrate, The Daily Upside, ETF.com, The Bond Buyer, PLANADVISER, PLANSPONSOR and Investopedia. education: Craig Newmark Graduate School of Journalism at CUNY Kalamazoo College at_money_since: 2020 articles: 395 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - CNBC - Bloomberg - Kiplinger - Barron's - Bankrate - WGN-TV - CBS News Radio - This Morning With Gordon Deal - Everyone's Talkin' Money social: - https://twitter.com/mitra_mallika - https://www.linkedin.com/in/mallika-mitra-4577a386/ published: '2022-07-27T19:48:17.000Z' modified: '2024-04-17T12:54:19.000Z' section: Banking tags: - News word_count: 672 canonical: https://money.com/fed-interest-rate-hike-july-2022/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Federal Reserve building photo with a climbing graph superimposed that shows a difference between a low interest rate and a high interest rate](https://img.money.com/2022/07/News-Next-Fed-Rate-Hike-Biggest-Ever.jpg?crop=0px%2C166px%2C2880px%2C1620px&quality=85) 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](https://money.com/fed-interest-rate-hike-june-2022/). July's rate hike brings the target range for the federal funds rate to 2.25%-2.5%. In a [news release](https://www.federalreserve.gov/newsevents/pressreleases/monetary20220727a.htm), 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](https://www.federalreserve.gov/newsevents/pressreleases/monetary20220615a.htm), when it said that overall economic activity appeared to have picked up. Consumer prices [jumped 9.1%](https://money.com/inflation-june-2022-cheaper-prices/) 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](https://money.com/gas-prices-painful-facts/), grocery store and, well, nearly everywhere else you shop. Despite economists and consumers hoping the inflation rate will fall, prices keep climbing higher. The Federal Reserve is trying to fix that by [hiking interest rates](https://money.com/interest-rate-hike-investing-strategy/), which increases the cost of borrowing and essentially encourages consumers to spend less money. That, in turn, should bring down inflation. Theoretically. ## Is this a big rate hike? This is the second consecutive rate hike of 0.75 percentage points the Fed has enacted recently**.** Earlier this month, investors were expecting the Fed to raise interest rates by 100 basis points, or 1 percentage point, which [Bloomberg News](https://www.bloomberg.com/news/articles/2022-07-13/fed-could-weigh-historic-100-basis-point-hike-after-cpi-scorcher) reported would have been the largest increase since the central bank began implementing overnight rate hikes to conduct monetary policy in the early 1990s. Expectations, however, came down in recent weeks. The 0.75-percentage-point increase was in line with what economists were predicting. Still, when the Federal Reserve raised interest rates by the same amount in June, it was the largest increase since 1994, meaning the central bank is continuing to be aggressive in its fight against inflation. And more hikes are likely on the way: The FOMC said in its Wednesday news release that it "anticipates that ongoing increases in the target range will be appropriate." ## What the Fed rate hike means for you Higher interest rates means it's more expensive to borrow money, which can impact everything from variable-rate private [student loans](https://money.com/student-loans/) and [car loans](https://money.com/get-a-car-loan/) to [mortgages](https://money.com/best-mortgage-lenders/) to [credit cards](https://money.com/best-credit-cards/). Mortgage rates have been on a slight upswing, with [Freddie Mac's benchmark rate](https://money.com/current-mortgage-rates/) for a 30-year fixed rate mortgage hitting 5.54% last week, a rise of 0.03 percentage points from the week before. That's put potential homebuyers in a tough spot. Christopher Jones, chief investment officer at Edelman Financial Engines, [told Money earlier this year](https://money.com/dollar-scholar-fed-interest-rate-hike/) that credit card rates, adjustable-rate mortgages and such will “ratchet up in lock-step” with the Fed. That means it may be a good time to [refinance your mortgage](https://money.com/fed-rate-hike-march-2022-mortgage-refinance/) or [pay down credit card debt](https://money.com/how-to-pay-off-credit-card-debt/) — before rates head even higher than they are now. Making borrowing and spending more difficult via interest rate hikes can also hurt your investing portfolio as it tends to correlate with lower prices in [stocks](https://money.com/how-to-buy-stocks/), [cryptocurrency](https://money.com/what-is-cryptocurrency/) and other markets. Try not to panic about a shrinking balance in your [401(k)](https://money.com/what-is-a-401k-rollover/): [Experts say](https://money.com/fed-rate-hike-investor-advice/) knee-jerk reactions can hurt your portfolio, and investing over the long term is the way to build wealth. Plus, the low prices we're seeing now could provide a [buying opportunity](https://money.com/investing-moves-bear-market-stocks/). If you have money on the sidelines you want to put to work, [financial advisors](https://money.com/how-to-choose-a-financial-advisor/) tend to recommend [dollar-cost averaging](https://money.com/bear-market-new-investor-tips/), or investing a set amount of money at regular intervals. That way, you're not tempted to try to [time the market](https://money.com/buy-the-dip-stock-crypto-strategy/) — which is nearly impossible to do consistently. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/fed-interest-rate-hike-july-2022/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Banking", "item": "https://money.com/banking/" }, { "@type": "ListItem", "position": 3, "name": "Interest", "item": "https://money.com/interest/" }, { "@type": "ListItem", "position": 4, "name": "What the Fed's Latest Interest Rate Hike Means for Mortgage Rates, Credit Cards and More" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/fed-interest-rate-hike-july-2022/#webpage", "url": "https://money.com/fed-interest-rate-hike-july-2022/", "name": "What the Fed's Latest Interest Rate Hike Means for Mortgage Rates, Credit Cards and More", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2022-07-27T19:48:17.000Z", "mainEntity": { "@id": "https://money.com/fed-interest-rate-hike-july-2022/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/fed-interest-rate-hike-july-2022/#breadcrumb" }, "dateModified": "2024-04-17T12:54:19.000Z" }, { "@type": "NewsArticle", "headline": "What the Fed's Latest Interest Rate Hike Means for Mortgage Rates, Credit Cards and More", "articleSection": "Banking", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2022/07/News-Next-Fed-Rate-Hike-Biggest-Ever.jpg?crop=0px%2C166px%2C2880px%2C1620px&quality=85", "width": 1012, "height": 569, "caption": "News-Next-Fed-Rate-Hike-Biggest-Ever" } ], "author": [ { "@type": "Person", "name": "Mallika Mitra", "url": "https://money.com/author/mallika-mitra/", "@id": "https://money.com/author/mallika-mitra/#author", "description": "Mallika Mitra is a contributing editor for Money, based in Chicago. She has covered investing and retirement for seven years and her work has appeared in CNBC, Bloomberg, Kiplinger, AARP, Barron’s, Bankrate, The Daily Upside, ETF.com, The Bond Buyer, PLANADVISER, PLANSPONSOR and Investopedia.\r\n", "image": "https://img.money.com/2020/05/Headshot.png?w=640&h=640&crop=1", "email": "mallikaamitra@gmail.com", "jobTitle": "Contributing Editor", "alumniOf": "Craig Newmark Graduate School of Journalism at CUNY Kalamazoo College", "subjectOf": [ { "@type": "WebPage", "url": "https://cnbc.com", "name": "CNBC" }, { "@type": "WebPage", "url": "https://bloomberg.com", "name": "Bloomberg" }, { "@type": "WebPage", "url": "https://kiplinger.com", "name": "Kiplinger" }, { "@type": "WebPage", "url": "https://barrons.com", "name": "Barron's" }, { "@type": "WebPage", "url": "https://bankrate.com", "name": "Bankrate" }, { "@type": "WebPage", "url": "https://wgntv.com/midday-news/your-money-matters-why-is-crypto-so-popular/", "name": "WGN-TV" }, { "@type": "WebPage", "url": "https://podcasts.apple.com/us/podcast/the-wall-street-journal-travel-editor-scott-mccartney/id1500053390?i=1000505352440", "name": "CBS News Radio" }, { "@type": "WebPage", "url": "https://thismorningwithgordondeal.com/b/Lots-of-People-Think-NFTs-Are-Cryptocurrency-and-Theyre-Wrong/306379835851553325.html", "name": "This Morning With Gordon Deal" }, { "@type": "WebPage", "url": "https://podcasts.apple.com/us/podcast/how-to-invest-in-a-recession/id957163760?i=1000596422109", "name": "Everyone's Talkin' Money" } ], "sameAs": [ "https://twitter.com/mitra_mallika", "https://www.linkedin.com/in/mallika-mitra-4577a386/" ], "worksFor": { "@id": "https://money.com/#organization" } } ], "publisher": "https://money.com/#organization", "datePublished": "2022-07-27T19:48:17.000Z", "description": "The Federal Reserve has announced it's hiking interest rates by 0.75% in hopes of curbing inflation — its fourth increase in four months.", "abstract": "The Federal Reserve has announced it's hiking interest rates by 0.75% in hopes of curbing inflation — its fourth increase in four months.", "@id": "https://money.com/fed-interest-rate-hike-july-2022/", "inLanguage": "en-US", "dateModified": "2024-04-17T12:54:19.000Z", "wordCount": 672, "keywords": [ "News" ], "about": [ { "@type": "Thing", "name": "Bank", "sameAs": [ "https://en.wikipedia.org/wiki/Bank" ] }, { "@type": "Thing", "name": "Interest", "sameAs": [ "https://en.wikipedia.org/wiki/Interest" ] }, { "@type": "Thing", "name": "Federal Reserve", "sameAs": [ "https://en.wikipedia.org/wiki/Federal_Reserve" ] } ] } ] } ```