What the Fed’s Rate Hike Means for Inflation, Housing, Crypto and Stocks

America’s central bank increased its benchmark interest rate on Wednesday, pushing it up by a quarter percentage point. The hike — the first since 2018 — was widely expected. But at a time when Russia’s war in Ukraine has roiled global markets, U.S. inflation is at its highest level since the 1980s and Covid-19 cases are increasing in some parts of the world, consumers and investors are contending with the prospect of rates going even higher.

At stake: Will stocks tank or soar? Will the pandemic-induced demand for housing continue even though borrowing costs are going up? And will rate hikes be enough to tame inflation?

“The Fed is faced with a real predicament,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments. “Even before the Russia-Ukraine crisis, the Fed was facing an inflation problem and also an expectation that economic growth would slow. The overall economic growth impact is less pronounced in the short term, but the longer the conflict drags on, the more risk we will see.”

What the Fed does to interest rates affects nearly every aspect of Americans’ financial lives, from the interest rates on credit cards and auto loans to the returns on their retirement savings.

And this increase is expected to be the first of many. Before the meeting, traders were pricing in a total of seven rate hikes this year and the Fed itself signaled six more hikes after this one.

Here’s what experts say consumers should be mindful of as interest rates rise: