WASHINGTON, September 17 — The Federal Reserve is widely expected to raise interest rates on Wednesday, its first hike in more than three years, with markets pricing roughly a 90% chance of a quarter-point move, according to the CME FedWatch Tool. The bottom line: the figure that matters is 0.25 percentage points, and futures traders have all but locked it in. A higher fed funds rate can eventually mean banks pay slightly more on deposits, but the move is usually gradual and basic accounts may still offer very little.
Checking account rates have barely moved in 2026 — the national average sits around 0.07%. Checking accounts generally pay low returns because they are built for easy access and everyday payments rather than earning interest, according to Yahoo Finance.
A hike could nudge checking-account earnings up, but only slightly. Regular savings accounts currently average about 0.38%. High-yield savings accounts pay far better, with many in the 3% range and some close to 4%.
Money market accounts are another route: the national average is only about 0.63%, but high-yield money market accounts mostly pay in the mid-3% range, with some just below 4%. Certificates of deposit could also benefit, and banks have already started raising some CD rates, according to Yahoo Finance.
Borrowers feel it faster
Credit-card users are likely to feel the impact quickly. Card interest rates have climbed sharply, from around 16% in 2021 to more than 22% today. People who pay their full balance every month generally avoid interest, so the increase has little direct effect on them.
Those who carry a balance can see costs rise as variable card rates adjust. Michele Raneri, vice president and head of U.S. research at TransUnion, expects only a “minimally higher” borrowing cost for consumers as variable-rate products reflect the Fed’s move, according to Yahoo Finance.
A consumer carrying the average second-quarter 2026 credit-card balance of $6,610 at a 22% APR could see the minimum monthly payment rise by about $1.38 if the higher rate is passed through, Raneri said. That looks small month to month, but it compounds for people carrying large balances or paying only the minimum, she said. Raneri also said cutting revolving card debt can help consumers limit the impact of higher rates.
Personal-loan rates have moved higher too. The average personal-loan rate is currently around 11.86%, while advertised rates generally run in the 7%-8% range, though the actual rate depends on factors such as creditworthiness and the lender.
Mortgages don’t move in lockstep
Mortgage rates work differently. A Fed hike does not automatically push mortgage rates up by the same amount. They are heavily influenced by the bond market and 10-year Treasury yields, and markets often price in expected Fed moves before the Fed acts.
Mortgage rates hit three-year lows around the end of February and early March, then moved higher after the war in the Middle East began. They have recently neared or crossed 7%, depending on the source tracking them, as 10-year Treasury yields have also risen.
Housing analysts at the Mortgage Bankers Association and Fannie Mae expect mortgage rates to stay above 6.5% through 2027, meaning buyers may keep facing high borrowing costs even if the Fed’s move is small. Higher rates can also bring more volatility to stocks. Kevin Gordon, head of macro research and strategy at Schwab, cited the old Wall Street saying, “Don’t fight the Fed,” because hiking cycles can bring significant market turbulence, according to Yahoo Finance.
Historical data shows the S&P 500 has suffered an average maximum loss of more than 10% within 12 months after the start of a higher-rate cycle, Gordon said. He added that the current economic backdrop remains relatively favorable for the Fed to raise rates and that the economy could withstand more than one hike.
Goldman Sachs partner John Shugar is relatively optimistic on stocks over the longer term, expecting the S&P 500 to rise above 8,000 within one year, and said investors could still find opportunities in several AI-related consumer sectors. Next up: the Fed’s actual decision and the language that accompanies it, plus how quickly banks pass any move through to deposit and card rates.
