Test: Familiarize Yourself with the Federal Reserve
The Federal Reserve, established in 1913 by the Federal Reserve Act, has been a cornerstone of the U.S. economy, making monetary policy decisions that significantly affect various sectors. One such area is the housing market, and in particular, mortgage rates.
In 2025, the Federal Reserve's schedule includes two notable meetings: the 16-17 September and the 28-29 October meetings. The next Federal Reserve meeting, following the one in September 2023, has yet to be scheduled for the remainder of the year.
The Federal Reserve's primary tool for managing the economy is the federal funds rate, which is the interest rate at which banks lend reserve balances to each other overnight. When the Fed raises the federal funds rate, it makes borrowing more expensive for banks, which can lead to higher interest rates for consumers on loans such as mortgages.
In 2022, inflation hit a pandemic-induced 40-year peak. In response, the Federal Reserve launched an aggressive rate-hiking campaign to combat inflation, resulting in the federal funds rate being lifted to its highest level in more than two decades.
This rate-hiking campaign has implications for homebuyers in 2025. Higher mortgage rates can make homeownership more expensive, potentially slowing down the housing market.
If you're interested in understanding more about the Federal Reserve, its impact on the economy, and investment opportunities, consider signing up for Kiplinger's expert advice service. Delivered via email, this service offers insights into investing, taxes, retirement, personal finance, and more.
For those who want to test their knowledge on the Federal Reserve, Kiplinger also offers a quiz. And if you're looking for investment opportunities that could potentially benefit from Fed rate cuts, Kiplinger provides a list of best stocks to buy.
To stay informed about the latest news and developments regarding the Federal Reserve, explore Kiplinger's popular Fed articles, linked below.
[Link to Kiplinger's popular Fed articles]
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