Federal Reserve Poised to Raise Interest Rates for First Time in Three Years

Why it matters locally: An increase in the federal funds rate could lead to higher borrowing costs for Iowans seeking auto loans or carrying credit card balances.

WASHINGTON D.C. — Federal Reserve Chairman Kevin Warsh and his colleagues are widely expected to raise the central bank's benchmark interest rate Wednesday. This action would mark the first rate increase in three years. Economists and market analysts anticipate the move as part of the Fed's strategy to address current inflation levels. Raising the benchmark rate typically aims to reduce demand in the economy and help stabilize prices. Such an increase in the federal funds rate could affect consumer borrowing. Individuals may face higher costs when taking out loans for car purchases or carrying balances on credit cards.