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Wednesday, May 3, 2023

The Daily Money: Fed expected to hike rates again today. What it means for you.

Even though this may be the central bank's final rate bump of the year, it could carry consequences for consumers.
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The Daily Money

ALL THE MONEY NEWS YOU NEED TO KNOW

Wed May 3 2023

 

Bailey Schulz Money Reporter

@bailey_schulz

Good morning, Daily Money readers. It's Bailey Schulz here to bring you the day's top stories.

The Federal Reserve is expected to raise its key short-term interest rate one more time this year with a 25 basis point hike to help curb inflation. The Fed will reveal  its decision at 2 p.m.  

Even though this may be the central bank's final rate bump of the year, it could carry consequences for consumers.  

Ap Bank Collapse Federal Reserve F A Usa Dc

Federal Reserve Chair Jerome Powell speaks during a news conference Wednesday, Dec. 14, 2022, at the Federal Reserve Board Building, in Washington.

Jacquelyn Martin, AP

How the Fed's rate hike could affect you

Climbing interest rates have already tested some borrowers' ability to repay their debts. Another quarter-point hike would cost consumers an additional $1.7 billion over the next 12 months, bringing the annual cost of the Fed's recent rate hikes to a total of more than $33 billion, WalletHub estimates. 

The average APR on a new credit card offer – already its highest in decades at 23.84% – is expected to go even higher if interest rates are raised, making it harder to pay off credit card debt.   

But there's good news for homebuyers. Since this week's hike is expected, it should not impact mortgage rates. Confirmation of a pause could actually lead to some mortgage rate relief.  

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The musician and son of Ethiopian immigrants has partnered with Blue Bottle Coffee on Samra Origins, a new brand of coffee products named after The Weeknd's mother. The brand, which honors his Ethiopian roots and the culture of the country long considered the birthplace of coffee, debuts on May 9.  

About The Daily Money

Each weekday, The Daily Money delivers the best consumer news from USA TODAY. We break down financial news and provide the TLDR version: how decisions by the Federal Reserve, government and companies impact you.

Federal Reserve Board Chairman Jerome Powell speaks during a news conference after the Federal Reserve announced that it would raise interest rates by a 0.5 percentage point to 4.5.

The Fed continues to push the federal funds rate higher to curb inflation, which has slowed but still poses an economic threat.

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Samra Origins coffee, a partnership with Abel
 

The Weeknd brews up a new project: his own coffee brand

The Weeknd teamed with Blue Bottle Coffee of Oakland, California on a new Ethiopian coffee named Samra Origins, paying tribute to his parents.

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18. Tuesday Morning     • Industry:  Retail Retailer Tuesday Morning filed for bankruptcy on May 27. The discount homeware brand has over 687 stores in nearly 40 states, though as part of its filing, the company said it would close around 230 of those locations. As a nonessential business, Tuesday Morning closed all of its stores in March, furloughing around 9,000 employees, most of whom have since returned to work.     ALSO READ: The Most Commonly Spoken Foreign Language in Each State
 

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