The Federal Reserve Bank announced a 75-basis point interest rate hike on Wednesday, a 50 percent greater increase than the central bank had initially signaled it was going to make for June. Even with the rate hike, interest rates will still only be around 1.6 percent, close to all-time lows. Banks that borrow money at the Federal Funds rate then need to charge a comparable rate to the people and institutions that borrow money from them. The technology-heavy Nasdaq, whose companies tend to hold extra debt making them particularly sensitive to interest rate increases, has fallen more than 30 percent. A recession for Americans following interest rate hikes will be a double-edged sword.
