How a Federal Reserve Rate Hike Affects You: From Loans to Long-Term Growth

When the U.S. central bank—commonly referred to as the Federal Reserve—raises interest rates, the effects ripple far beyond its borders, influencing economies across the globe, including the UK. These hikes are intended to curb inflation and maintain macroeconomic balance, but they also result in costlier borrowing, tempered consumer activity, and shifts in international trade dynamics.