What the Fed's latest interest rate hike means for you

What the Fed's latest interest rate hike means for you

The Federal Reserve raised the target federal funds rate by another 0.75 percentage points to curb inflation.

The federal funds rate is the interest rate at which banks borrow and lend to one another.

Fed officials had already raised short-term borrowing rates 1.5% points earlier this year.

This marks the most significant increase in nearly three decades.

The central bank has indicated a greater increase in the near future until inflation shows signs of a pullback.

For starters, this means, the rate hike will increase the financing costs for consumer borrowing.

So, as the federal funds rate rises, credit card rates rise as well.

But, on the flip side, higher interest rates also mean savers will earn more money on their deposits.