The Federal Reserve is expected to raise rates another 0.75 percentage point on Wednesday in its continuing effort to stamp out stubbornly high inflation. Americans are only beginning to feel the full impact of these moves.
By raising rates, the Fed seeks to cool the economy and rein in inflation, which continued to run higher than expected in August. Higher interest rates raise the cost of carrying credit-card balances and taking out mortgages, car loans and other debt, but consumers may not immediately feel the effects. Even outsize increases like the central bank’s recent hikes reach wallets and the broader economy somewhat gradually over weeks and months, economists say.