The quarter-point increase lifts the Fed’s key rate to about 3.9% and could result in higher borrowing costs for mortgages, auto loans, and credit cards.
The Treasury wants to use short-term borrowing to finance the national debt. While short-term interest rates are usually lower than long-term rates, they’re also more volatile.
A report from Bankrate found that lenders rejected nearly half of all loan applications in 2024, and auto loan and mortgage refinance rejections hit record highs.