# Fed raises rates for first time since 2023

> The Federal Reserve's quarter-point interest rate hike will help savers but hurt borrowers, widening an already stark divide in how Americans experience the economy.
- Title: Fed raises rates for first time since 2023 · CBS News
- Summary: The Federal Reserve's quarter-point interest rate hike will help savers but hurt borrowers, widening an already stark divide in how Americans experience the…
- Keywords: federal reserve, interest rates, borrowers, savers, mortgage rates, housing market, inflation, economy, news, Fed, raises, rates
- Source: CBS News — https://cbsnews.com/video/greater-impact-of-the-feds-interest-rate-increase
- Read time: 2 min
- Topics: federal reserve, interest rates, borrowers, savers, mortgage rates, housing market, inflation, economy, news
## Fed hikes rates for first time in years
The Federal Reserve raised interest rates by twenty-five basis points, the first increase since twenty twenty-three. More hikes could follow by year end based on Fed projections.
## Bad news for borrowers
Car loans are around seven percent. Personal loans average eleven point eight percent. Credit card balances are averaging twenty-one to twenty-two percent. Borrowers will be hurt by the rate increase.
## Good news for savers
Savers can find certificates of deposit and money market accounts and high-yield savings accounts at three to four percent. Savers are experiencing renewed excitement about these returns.
## Rate hikes cannot fix everything
The Fed cannot use interest rates to address oil prices or tariffs, which are set in stone. Service inflation in childcare, elder care and college costs continues to weigh on Americans.
## Medicaid rolloff adds pressure
Many people will roll off Medicaid in the coming months. Healthcare costs are a major concern alongside other service inflation affecting Americans' finances.
## Economic divide widens
People who bought homes five, ten or fifteen years ago and those with four-oh-one-k plans or pensions experience the economy very differently from those struggling with current costs.

> I don't really remember a time where things have diverged so much, in terms of the experience on the ground, living in the economy.
## Mortgage rates approach seven percent
Thirty-year fixed rate mortgages are approaching seven percent. This makes buying more expensive for new buyers but locks in existing homeowners with lower rates.
## Housing costs have doubled
Six years ago, a median household buying the median house devoted about twenty-eight percent of income to housing. Today that figure is forty-four percent. The cost of carrying the same house has doubled.
## Homeownership becomes luxury expense
Monthly housing costs of two thousand to four thousand dollars preclude homeownership for many people. Owning a home now requires significant wealth rather than being an achievable American dream.
## Housing market stuck by multiple factors
The housing market has been stuck for a couple of years. Price, mortgage rate, homeowner's insurance and property taxes all contribute to making homeownership unaffordable for many.
## Wealth building beyond housing
There are many ways to accumulate wealth beyond homeownership. As housing becomes less accessible, Americans may need to explore alternative paths to building financial security.
## Key takeaway

The Federal Reserve raised interest rates by twenty-five basis points for the first time since twenty twenty-three, benefiting savers with higher CD and savings account returns but increasing costs for borrowers on car loans, personal loans and credit cards.