Hey there! Have you ever heard about the U.S. Federal Reserve? It’s like the country’s big bank that helps keep the economy running smoothly.
On Wednesday, the Federal Reserve decided to keep its main interest rate the same, at up to 4.5%. But what does that mean?
What Are Interest Rates?
Interest rates are like the cost of borrowing money. When interest rates are low, it’s cheaper for people and businesses to borrow money to buy things like houses or start companies. When they’re high, borrowing money can cost more.
Why Did They Keep Rates the Same?
The Federal Reserve wants to see where the economy is headed before changing rates. Right now, there are things like tariffs (extra taxes on goods from other countries) that are affecting the economy. This makes them cautious about changing rates too soon.
How Does This Affect You?
Even if you’re not borrowing money now, interest rates can impact things like jobs, prices at the store, and even how much your parents might pay for a loan.
So, keeping the rates the same is like pressing the pause button to see what happens next!
Reference(s):
cgtn.com
