The Fed’s rate-hike streak just hit double digits

Yesterday, the Federal Reserve’s policy-making committee voted to raise interest rates by 0.25%. And if it feels like you’ve read that sentence before… it’s because you probably have.

This marks the tenth consecutive time the Fed has voted to raise baseline interest rates, marking its most aggressive pace of monetary policy tightening since the early 1980s (the last time inflation was this high). Interest rates are now set at a range between 5.0% and 5.25%, up from near-zero as recently as last March.

And much like the meteor that wiped out the dinosaurs, higher interest rates have a far-reaching impact.

• Average credit card interest rates are currently sitting at 23.7% – the highest level on record and up from 16.3% a year ago.
• The yield on a two-year US Treasury bond increased from 2.1% in March of last year to 3.8% this week.
• The average 30-year fixed mortgage rate has more than doubled since last January (3.29% → 6.58%).

Plus, the recent historic collapses of First Republic Bank and Silicon Valley Bank both occurred in part because the Fed’s rate hikes over the past 14 months had devalued each bank’s long-term assets.

👀 Looking ahead… In a press conference yesterday afternoon, Fed Chair Jerome Powell said the central bank hasn’t yet decided whether to raise interest rates again following its next meeting in mid-June, or whether to leave rates untouched. Powell also reiterated the Fed’s focus on returning annual US inflation to its long-term target of 2% (it was 5.0% in March).