Earlier this month, the Federal Reserve raised interest rates a quarter percentage point, aiming to slow the acceleration of inflation. But how does that actually work? Here’s a clearer explanation.
💵 The Fed raises its interest rate in hopes of triggering a domino effect across the economy that pushes up borrowing costs. The main goal is to cool prices by encouraging people and businesses to spend more carefully.
💵 When the Fed is worried about the labor market, it cuts interest rates to boost consumer spending and investment.
💵 The small rate hike won't significantly affect the economy, but it comes as many borrowing costs are rising. | 
