A Look at Yesterday’s Fed Meeting

🏦 The Fed’s Open Market Committee voted to raise interest rates by 0.25% following the conclusion of its two-day meeting yesterday afternoon, the first increase in over three years.

• The rate hike was approved by an 8-to-1 margin, with the lone dissenting vote pushing for a 0.5% increase instead.
• The committee also updated its projections for this year’s GDP (from 4% to 2.8%) and overall inflation (from 2.7% to 4.1%).
• Fed officials indicated an aggressive path ahead, with plans to increase rates again after each of the six official meetings left this year. If carried out, this would result in a minimum 1.75% increase by the end of the year; rates currently range from 0.25%–0.5%.

📸 The big picture: The Fed’s decision to raise the overnight rate on lending between banks will have a domino effect on borrowing costs throughout the entire US economy.

You can expect to see higher rates on mortgages, credit cards, student loans, saving accounts, corporate debt and more. How much those rates increase will depend on how investors, businesses and households respond.

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