Rising interest rates don’t affect every industry the same way. A rate hike from the Federal Reserve (Fed) can flow through to borrowing costs across loans, credit cards and business financing – but the impact often depends on how a loan is priced, when it resets and how lenders assess risk. Importantly, rate hikes can occur alongside a resilient economy: While higher rates may cool some interest-sensitive pockets, they don’t automatically translate into weaker growth or consumer spending across the board. The Fed raised its benchmark for short-term interest rates by 25 basis points on September 16, the first increase since July 2023 – and Fed officials signaled that at least one more rate hike could come this year.
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