NORFOLK, Va. - By now we've likely all seen the headlines that the Federal Reserve has raised interest rates.
But what does this actually mean in terms of your money and investments?
Interest rates are one tool the federal government uses in hopes to curb inflation. To the everyday consumer, inflation has been seen through higher gas prices and higher food costs.
To offset this inflation, the Fed raises interest rates. Right now they have done so by .25%.
Who will this impact?
You, if you're planning on buying a home, using a credit card, or looking to invest. Mortgage rates, for example, are about 4% so it's going to cost you more to borrow money from the bank.
Kirki Fuller, Senior Retirement Plan Consultant, OneDigital Investment Advisor, said, "in the past, historically, that's exactly why we've gone into a raising rate environment or even on a lowering rate environment, is because the Fed is looking at the overall economy and looking at that growth and using the tools that they have in place to help us and help our economy not be stalled and not go into a recession."
The biggest takeaway: there's going to be a higher cost for borrowed money.
Also be aware that this likely isn't the final increase. Fed Chairman Jerome Powell said we could see more rate increases this year.
