Rates increased by 0.25% to combat inflation above 2% target for over five years, with further hikes possible before year-end. Higher rates make borrowing costlier for mortgages and loans but improve savings returns; banks immediately raised prime lending rates to 7%.
Fed raises rates despite Trump pressure as inflation fight continues
Higher borrowing costs will increase debt burdens for Americans seeking mortgages, loans, and credit, particularly affecting those with lower incomes.