Todd Davis

Federal Reserve Could Raise Interest Rates

For the first time in nine years, the Federal Reserve is set to hike interest rates. It's set to make its announcement this afternoon.

Experts said a federal funds rate hike is likely. That's the rate banks charge each other, but it also ends up impacting how much you'll pay for things like home loans and credit cards.

"The Fed will probably boost interest rates by 1/4 of 1 percent," says Bernard Weinstein, professor at Southern Methodist's Cox School of Business. "We need to remember that interest rates have been close to zero for the last five years."

That means the interest rates you pay will go up too.

"I do think we can anticipate some very small increases as well as consumer interest rates," Weinstein said.

Experts say that doesn't mean you need to run out and buy a house because nothing's going to change quickly or by much right away. How much more can you expect to pay?

"If you have a variable [mortgage] rate, you'll pay extra $10," Weinstein said.

Weinstein also said there will be slight increases in consumer credit card rates, but those shouldn't  impact prices much or consumer buying. The rate you get for savings accounts should go up too- eventually.

The cheap money was meant to help boost the economy. Economists say the fact that the Fed is even considering raising rates means the economy is doing better than before. Many stocks closed higher yesterday and the market is already doing well today, means Wall Street's ready for a rate hike too.

The Fed announcement is set to take place at 2 p.m. followed by a press conference at 2:30 p.m.

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