In Case You Missed It

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ICYMI: Interest Rate Increases Coming This Month

In case you missed it, the Federal Reserve is moving forward with its plans to raise interest rates this month, despite the impacts of Russia's invasion of Ukraine.

Testifying before Congress this week, Federal Reserve Chair Jerome Powell said it would be "appropriate" to raise interest rates in March. And in an unusual turn, the Fed Chair testified that he would support a hike of 25 basis points (or 0.25%). Powell usually avoids stating such specifics in his testimonies and answers.

Raising interest rates is one of the main tools the central bank uses to reduce inflation. It makes borrowing more expensive for all of us (like for a mortgage or a car loan), so people tend to buy less in higher interest-rate environments. That helps slow down the economy and cool inflation.

Investors had thought the Federal Reserve might delay its interest rate hike, with the Russia-Ukraine crisis impacting stock markets and the economy. But with a strong labor market (more jobs were added in February than expected) and a resilient economy, the Fed's case to raise interest rates is a strong one.

- Kristin

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Season 2 of the "Money Confidential" podcast is back with "Taxes in Ten," a six-episode mini-season covering your top tax questions. Host and nationally recognized money expert, Stefanie O'Connell Rodriguez, is teaming up with The Balance's very own Editor-in-Chief, Kristin Myers, as well as Caleb Silver, Editor-in-Chief of Investopedia, to talk about everything from doing your own taxes to the specific tax considerations of different life stages. You can listen to "Taxes in Ten" now, with new episodes airing every Monday. Listen now!