What the Fed Rate Hike Means for You
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What does the Fed’s first rate hike since 2023 mean for everyday borrowers?
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It's Thursday, September 17th, and money just got more expensive. We start here. For the first time in years, the Fed hikes interest rates. And
when it's more expensive to borrow money, you spend less in the economy.
What it means for your wallet and for the new Fed chair's relationship with the president. The federal government spends billions to tell
employees not to work. We now are being told that that cost the government about $9.5 billion. What a new watchdog report tells.
Us about last year's Doge cuts and a life-changing procedure for a pair of conjoint twins.
She had never laid side by side with her sister face to face.
We'll tell you the story of two-year-old sisters who can now look each other in the eye. From ABC News, this is Start Here. I'm Mike Deboski. Hey there, Brad is out for today and tomorrow, so you've got me in the meantime. If there's been one defining story of American life in twenty twenty six, it's that things are really expensive.
We use a lot of diesel for agriculture. You're not gonna leave the the crops in the field, you're gonna go pay the price, whether it's six dollars or seven dollars.
Last week, diesel prices in the U.S. set a new record, surging past six dollars a gallon on average, according to Gas Buddy. Diesel is the fuel of trucks, right? Which means it costs more for retailers to move their product around. In fact, one industry expert noted that for every $1 increase in diesel, truckers spend about $400 more per tank. Farmers also use diesel in their heavy equipment. To produce the food we eat, driving up prices at the grocery store. Normal gas for your car is now about $440 a gallon on average.
Bad news for the consumer. Not only are they paying more for gasoline to fill up their car, but the auto loan on that car is now going to be more expensive.
Meanwhile, borrowing costs for houses are getting pricier as well, with the average rate on a 30-year fixed-rate mortgage now sitting at 7.24%. That's up more than a full percentage over this time last year. Federal government data shows that prices for the month of August are 3.4% higher than they were a year ago, and that cascading series of events has, over the course of this year, put a ton of pressure on the Federal Reserve to do. Do something about inflation. And on Wednesday, they did. Let's get into it with ABC's Elizabeth Schholze, who covers the economy for us. Elizabeth, okay, so rates are going up by how much?
So, Mike, this was a quarter point interest rate hike from the Federal Reserve. And this is the first time the Fed has hiked rates in three years. So a big moment here when you think about the Fed taking this position that it needs to do something, use its policy tool available, which is changing interest rates, to try to fight inflation. For more than five
years.
How will higher interest rates affect mortgage, credit‑card and auto‑loan costs?
two years inflation has been running above target. So our predominant focus is on the price stability side of our mandate.
The Fed was unanimous in this decision. It was all members of the Fed that voted said they think that rates should go up right now, which really speaks to the fact that inflation is too high and that the Fed wants to do what it can to try to bring it down. And just to kind of explain how that works, the idea is that higher interest rates make it more expensive for businesses and consumers to borrow money. And when it's more expensive to borrow money, you spend less in the economy. That idea that slowing down spending should help bring down prices. That's really what the Fed is aiming to do here.
Right, right, that makes sense. So you also mentioned that this is the first rate hike we've seen since twenty twenty three.
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Chapters
8 chapters
1
What does the Fed’s first rate hike since 2023 mean for everyday borrowers?
0:00–3:27
2
How will higher interest rates affect mortgage, credit‑card and auto‑loan costs?
3:27–7:15
3
Why did the government spend $9.5 billion to pay federal workers not to work?
7:15–10:10
4
What did the GAO watchdog report reveal about the “Doge” employee‑exit program?
10:10–14:27
5
How might the $9.5 billion payout impact future federal budgeting and cuts?
14:27–18:29
6
What are the medical details and significance of the conjoined twins’ separation?
18:29–21:56
7
How did the surgical team coordinate logistics to bring the twins from Ethiopia to St. Louis?
21:56–25:19
8
What are the broader economic and human‑interest takeaways from today’s news?
25:19–29:10