Fastest Four: What Does the First Fed Rate Hike Since 2023 Mean for You?
The Get Ready For The Future Show
What does the Fed's first rate hike since 2023 mean for your savings, your debt, and your portfolio? The Federal Reserve raised the federal funds rate by 0.25% at its September meeting, the first hike since 2023, and Fed members signaled one more hike is possible before the end of 2026. Here's who feels it:
- Credit cards and home equity lines of credit: borrowing costs typically rise almost immediately
- Fixed-rate mortgages: your monthly payment doesn't change
- Savers and retirees: yields on savings accounts, CDs, and money market funds tend to rise.
For investors, LPL Research found that in five of the last six hiking cycles since 1994, stocks pulled back in the first month and were positive 12 months later. Bonds followed a similar pattern. 2022 was the exception, and we explain why today looks different: inflation near 3.5% versus over 9% then, and much higher starting yields.
If you're living on investment income or rethinking your cash and bond mix, this is worth a conversation before the Fed's next move.
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