Transcript for Fed announces 0.75% interest hike rate
MORGAN NORWOOD: For the fifth time this year, the Federal Reserve is firing off another rate hike, a move that once again will impact your money, making it more expensive to borrow.
- We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses.
MORGAN NORWOOD: The Fed is raising a key interest rate by 3/4 of a point, and the hope is that it will help slow the continuing rise on prices on a variety of things, from homes, gas, and food. Americans paid 8.3% more for goods in August compared to a year ago.
- I feel it at the gas pumps. I feel it at the grocery store. I feel it at the restaurants. I feel it everywhere.
- We're suffering as middle class and lower class people.
MORGAN NORWOOD: But there are signs that higher interest rates have actually helped. The housing market has weakened and the construction of new homes has slowed.
- The way it was last year was just not normal, where you had five, six buyers for every one home. We're getting closer to that 1 to 1 ratio, which is normal and healthy.
MORGAN NORWOOD: According to the Fed, this interest rate hike won't be the last. They expect interest rates to hit 4.6% in the next year, inflicting yet another round of economic pain for the millions of Americans who have debt.
So for example, if you're carrying a $5,000 balance and are making minimum payments, you're already paying an additional $870 in interest because of rising rates this year. Well, after today's hikes, those interest payments ballooned to more than $1,100.
And the Fed is also predicting that the unemployment rate, which is now under 4%, could rise as well, saying today it expects it to go up to 4.4% by next year.
I'm Morgan Norwood, ABC News, Los Angeles.
This transcript has been automatically generated and may not be 100% accurate.