When the Federal Reserve raises interest rates, you feel it.
“The Federal Reserve has its fingers in your pocketbook to a greater degree than the IRS,” says Michael Reese, a CFP professional in Traverse City, Michigan.
The Fed most recently raised rates in December and forecast that there will be multiple rate hikes in 2018, with the first one likely occurring at this week’s meeting.
The committee sets monetary policy, primarily by raising or lowering the Fed’s target for the federal funds rate, which is used as the benchmark for a range of consumer interest rates.
Here are seven ways the Fed affects your pocketbook.