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Published: May 03, 2023 4 min read
Fed Reserve building with graph in the background
Eddie Lee / Money; Getty Images

Interest rates just got even higher, but the end of rate hikes — which have become routine for the past year — may be in sight.

On Wednesday, the Federal Reserve announced another quarter-point hike to the federal funds rate. That brings the target range to between 5% and 5.25%.

The federal funds rate determines how expensive it is for banks to borrow from each other, and it's the primary tool the Fed uses to maintain a healthy U.S. economy. A higher rate makes borrowing cost more, and banks end up up passing those extra costs on to consumers in the form of higher interest rates on products like credit cards. Mortgage rates and auto loan rates tend to rise alongside the federal funds rate, too.