| The Federal Reserve, looking to address the worst inflation in 40 years spurred by the coronavirus pandemic, is expected to raise interest rates by 0.25% at its meeting next week and not slow down until well into 2023.
In fact, Morgan Stanley expects the Fed to raise interest rates six times this year for a total of 150 basis points. The Fed is likely to hike rates by 25 basis points at its policy meeting next week, followed by additional 25 basis point hikes in May, June and July, with another two hikes in September and December, according to Morgan Stanley.
The Fed raising rates touches pretty much every single corner of the economy. The rate hike will likely impact American households on everything from loans and investments to savings, job prospects and prices for goods and services, reports CNBC's Greg Iacurci.
To that point, higher interest rates translate to costlier financing for borrowers. From an investment standpoint, the rate hike will likely pressure growth stocks and bonds will likely lose money in the short term.
The reason the U.S. central bank raises interest rates is to cool the economy to tame inflation, therefore, as Iacurci reports: if the policy has its desired effect, consumers should see recent rapid price increases for food, clothing, and other goods and services begin to moderate.
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