How Fed interest rate hikes will affect your credit card, mortgage | USA TODAY

This is why the Federal Reserve raises interest rates, and what it means for your bottom line.

RELATED: How do Federal Reserve interest rate changes affect your finances? https://bit.ly/3XSVTaI

The Federal Reserve is expected to whittle down the size of its rate increases again, but the slowdown is unlikely to help already squeezed consumers.

The Fed is predicted to boost interest rates for an eighth consecutive time on Wednesday, but only by a quarter point, down from the half-point hike in December and the four consecutive three-quarter percentage-point increases before that.

A quarter-point increase in the short-term benchmark fed funds rate would lift the target range to between 4.5% and 4.75%, the highest level since 2007 and up from 0% to 0.25% at the start of 2021.

The slower pace is intended to give the economy a chance to digest the Fed's earlier string of aggressive hikes. But consumers, having already felt the impact of those rate hikes, are already reeling.

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