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FEDERAL RESERVE (FED) RATE DECISION - Coggle Diagram
FEDERAL RESERVE (FED) RATE DECISION
INTEREST RATES
The Fed raised interest rates by 0.25%.
The new range is 3.75% – 4%.
This was the first rate increase since July 2023.
Most Fed officials expect another increase before the end of 2026.
WHY DID THE FED RAISE RATES?
Inflation is still high.
Inflation is above the Fed's 2% target.
Energy prices have increased.
The conflict with Iran has created pressure on energy prices.
The Fed wants to control inflation.
EFFECT ON SAVINGS
Higher interest rates can benefit savers.
Some banks may offer higher interest rates on savings.
Online and smaller banks may offer better returns.
People may earn more interest on their money.
EFFECT ON BORROWERS
Credit cards can become more expensive.
Variable-rate loans may have higher payments.
New loans could remain expensive.
Fixed-rate loans are generally not affected immediately.
EFFECT ON LOANS
They do not depend only on the Fed's rate.
They are also affected by Treasury bond yields.
New car loans can remain expensive.
Interest rates depend on broader financial conditions.
EFFECT ON COLOMBIA
🇺🇸 US dollar
🇨🇴 Colombian peso
International interest rates
Foreign investment
Credit conditions in Colombia