Here's What Federal Reserve's Back-to-Back 75-basis point Interest Rate Hikes Mean in Practice
As we know, The Federal Reserve raised yesterday
On July 27, the target federal funds rate by another 0.75 percentage points at the end of its two-day meeting, in an effort to curb unrelenting inflation.
Fed officials have already raised benchmark short-term borrowing rates 1.5 percentage points this year, including June's 75-basis point increase, which marked the largest increase in nearly three decades.
The central bank has indicated even more increases are coming until inflation shows clear signs of a pullback.
For starters, the rate hike will correspond with a rise in the prime rate and immediately send financing costs higher for many forms of consumer borrowing. Short-term borrowing rates will be among the first to jump. Also a great concern is posed by increasing signs of disruption in the real estate market as less and less potential homebuyers would be approved for mortgage loans since mortgage installments are surging.
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