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The Federal Reserve on Wednesday lifted its fed funds rate for the second time in just three months, and markets responded nearly immediately.
Less immediate is the impact the move could have on your wallet.
Most simply, the fed funds rate determines the interest rate at which banks borrow money short term.
Increases are passed on to other borrowers, mostly consumers, through higher rates on things like credit-card debt.
This debt is based on the banks’ prime loan rate, the interest rate used as a starting point for nonmortgage loans.
And so after what seemed like an arcane and abstract policy change from the Fed on Wednesday, this is the impact that might matter to those who don’t follow the news as closely as they follow their credit-card bill.
Here’s the quick rundown of the changes to prime loan rates – all to 4% from 3.75% – announced at major US banks so far: