Why You Don’t Feel Fed Rate Hikes in Your Bank Account
Higher rates from Washington don’t mean more interest just yet. But there are ways to shop around.
Why You Don't Feel Fed Rate Hikes in Your Savings Account
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Nine years after a global financial crisis caused U.S. interest rates to plunge, they are finally starting to rise again. The Federal Reserve began hiking the funds rate in December 2015, and the Federal Open Market Committee, led by Chair Janet Yellen, voted to boost rates another three times, including last month.
Higher rates for the Fed don’t automatically mean higher rates for consumers, though. The Fed directly controls the rate that banks charge each other for overnight deposits, but it has only indirect influence on other interest rates set by banks and the bond market.