Fed rate hike expected on Wednesday. See what it means for your money.
Summary
The Federal Reserve is expected to raise its main interest rate by 0.25 percentage points on September 16, the first increase in over three years. This move aims to address ongoing inflation partly caused by high energy prices, and more rate hikes may follow if inflation remains high.Key Facts
- The Fed's interest rate hike is anticipated on September 16 to combat inflation above its 2% goal.
- Inflation was 3.4% yearly in August, still higher than the Fed's target.
- Higher interest rates make borrowing more expensive, which can reduce spending and slow inflation.
- Energy prices have increased due to the ongoing conflict in Iran, keeping inflation pressure high.
- Diesel reached a record price of $6.27 per gallon; gasoline rose to $4.33 per gallon recently.
- The Fed raised rates 11 times last year when inflation peaked at 9.1%, bringing rates to 5.25%-5.5%.
- President Trump has called for lower interest rates, but economists expect the Fed to continue hikes if inflation persists.
- The Fed will release updated economic forecasts with the rate decision and hold a press conference afterward.
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