Fed Interest Rate Hike May Have Less of an Impact Than You Think

There is a very high chance the Federal Reserve will raise interest rates this week. So how will higher rates affect you?

The Federal Reserve building in Washington, D.C., on Jan. 22, 2008. Chip Somodevilla/Getty Images

There is a very high chance the Federal Reserve will raise interest rates this week.

It would be the first time the Federal Open Monetary Committee (FOMC)—the Fed’s rate-setting team—has lifted its benchmark rate since 2006, beginning the so-called return to normal.

Economists, traders, and policymakers have been pontificating, prognosticating, and placing bets about this decision for a long time, because the impact is expected to be far-reaching.

So how will higher rates affect you?

Depending on your situation, an increase in rates could be wonderful news, a disaster, or another headline story that after the initial excitement has no impact on your life.