No the Federal Reserve did not raise interest rates today. In fact the Fed’s target for the federal funds rate has been at 0.00-0.25% since December 2008.
This target is what’s known as the “fed funds rate” which is the rate that banks charge each other for overnight loans. The federal funds rate influences other short-term interest rates such as the prime rate which is the rate banks charge their best customers. And when the cost of borrowing goes up so does the rate on things like credit cards and home equity lines of credit.
The decision not to raise rates was widely expected. In its statement the Fed said that it needs to see more evidence of economic growth before it raises rates. The statement also said that the Fed is “monitoring developments in global financial markets” which have been volatile recently.
The Fed’s next meeting is in March and it’s possible that the Fed could raise rates then. But for now rates will stay where they are.
Will the Fed raise interest rates today?
As of right now the answer is unknown.
The Federal Reserve’s Open Market Committee is scheduled to meet later today and announce their decision on interest rates.
How might a Fed interest rate hike affect me?
A Fed rate hike could affect you in a few ways.
If you have a variable rate loan your monthly payments could increase.
If you’re thinking about buying a home a Fed rate hike could raise mortgage rates and make your loan more expensive.
Why does the Fed raise interest rates?
The Fed typically raises interest rates in order to slow down the economy and prevent inflation.
How often do rates get raised?
The Fed doesn’t have a set schedule for rate increases.
They assess the economy and make a decision on rates based on their findings.
I heard that the Fed lowered rates recently.
Is that true?
Yes in March 2020 the Fed lowered rates to 0.
00-0.
25% in response to the coronavirus pandemic.
Will the Fed’s decision today be unanimous?
It’s unlikely that the Fed will unanimously agree to raise rates today.
In June only two out of ten members voted in favor of a rate hike.
How will the markets react if the Fed raises rates?
It’s difficult to say how the markets will react as it will depend on a variety of factors.
In general however stocks tend to fall when rates are increased.
I’ve heard that a Fed rate hike could hurt the housing market.
Is that true?
A rate hike could potentially have a negative effect on the housing market by making mortgages more expensive.
Will a Fed rate hike cause inflation?
Raising rates is one of the Fed’s tools to help prevent inflation so it’s unlikely that a rate hike would cause inflation.
What is the current Fed Funds Rate?
The current Fed Funds Rate is 0.
00-0.
25%.
How do I know if the Fed raised rates?
The Fed will release a statement after their meeting that will announce any changes to interest rates.
I have a CD that’s about to mature.
Will a rate hike affect me?
A rate hike could affect you if you choose to renew your CD at a lower interest rate.
I’m thinking about opening a savings account.
Will a rate hike make any difference?
A rate hike could affect the interest rate you earn on your savings account balance.
I have a fixed-rate mortgage.
Will a rate hike make my payments go up?
No a rate hike will not affect your monthly payments if you have a fixed-rate mortgage.
I’m planning on taking out a car loan.
Will a rate hike affect my interest rate?
A rate hike could affect the interest rate you pay on your car loan as well as the monthly payment.
