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How the Federal Reserve’s rate hikes affect your finances

A man pushes his hotdog mobile shop along Fifth Avenue on Wednesday, July 27, 2022, in New York. he Federal Reserve raised its benchmark interest rate by a hefty three-quarters of a point for a second straight time in its most aggressive drive in three decades to tame high inflation. By raising borrowing rates, the Fed makes it costlier to take out a mortgage or an auto or business loan. In turn, consumers and businesses will likely borrow and spend less, cooling the economy and slowing inflation. (AP Photo/Andres Kudacki)

People shop at a supermarket on Wednesday, July 27, 2022 in New York. The Federal Reserve on Wednesday raised its benchmark interest rate by a hefty three-quarters of a point for a second straight time in its most aggressive drive in three decades to tame high inflation. The Fed is tightening credit even while the economy has begun to slow, thereby heightening the risk that its rate hikes will cause a recession later this year or next. (AP Photo/Andres Kudacki)

FILE - A "for sale" sign hangs from a post outside of a vacant business building in Belleville, N.J., Thursday, May 3, 2018. The Federal Reserve on Wednesday, July 27, raised its benchmark interest rate by a hefty three-quarters of a point for a second straight time in its most aggressive drive in three decades to tame high inflation. By raising borrowing rates, the Fed makes it costlier to take out a mortgage or an auto or business loan.(AP Photo/Julio Cortez, File)

How the Federal Reserve’s rate hikes affect your finances