Fed raises rates for first time in 3 years

Kevin Warsh and the Federal Open Market Committee voted unanimously to hike rates by a quarter point on Wednesday, the first increase since summer 2023.

More hikes likely before year ends

A majority of Fed leaders expect at least one more rate hike before December, with some projecting two additional increases depending on economic conditions.

Borrowing will get more expensive

Mortgages, auto loans, and credit cards will cost more as rates rise. First-time homebuyers could be priced out of the market if 30-year fixed rates continue climbing.

Savers get a silver lining

High-yield savings accounts will offer stronger returns as the Fed raises rates. The upside comes after years of minimal interest on savings.

Jobs could be affected too

Higher operating costs may force companies to reduce hiring and employee promotions as their cash flow tightens, though the Fed isn't immediately worried about job losses.

Warsh defends Fed independence from Trump

The new chair rejected questions about Trump and non-monetary policy, emphasizing the Fed must stay in its lane. Trump has previously pushed for lower rates.

“Independence is a two-way street. We let people who do trade policy and fiscal policy stay in their lane.”