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This is how a higher Fed rate could affect your finances

Federal Reserve Rate Hikes Impact
Posted at 3:14 PM, Jun 15, 2022
and last updated 2022-06-15 18:14:21-04

Record low-interest mortgages are long gone. Credit card rates will likely rise. You'll pay more for an auto loan.

The unusually large three-quarter point hike in the Fed's benchmark short-term rate is going to have a lot of impact on Americans' finances. The hope is that by making borrowing more expensive, the Fed will succeed in cooling demand for homes, cars and other goods and services and slow inflation.

If you're considering buying a home, take note that home rates have soared in the past few months and could continue to rise. Investor expectations for future inflation and global demand for U.S. Treasury notes are among the factors that could see mortgage rates making some dramatic moves.

The trouble in the housing market is expected to get, at least, a little easier in the near future. Potential home buyers have seen soaring prices and rates along with tough competition for homes.

Buying a car has been difficult for Americans as well. While multiple factors affect auto loan rates, a Federal Reserve rate hike could cause rates for auto loans to rise. Credit card rates are also expected to see an increase.