It’s hard to miss the buzz about the Federal Reserve’s decision to raise interest rates to slow inflation in 2022, but do you know how the Fed’s interest rate hike affects personal finances? The federal funds rate, as its officially known, is the interest rate that banks pay to borrow money from other banks. Banks are required by federal law to keep a minimum amount of money in reserve overnight, and those that fall short can borrow money from banks with excess reserves to make up the deficit. The Federal Reserve meets eight times a year to set the federal funds rate. It is considered one of the Fed’s primary tools for influencing the overall economy. The decision to raise or lower rates affects consumers’ personal finances, too. How does it do that? Watch this video to learn more. Soundsripe music license: 7JGOOXAYBJZZ0KG4 Join The Penny Hoarder for daily emails featuring our best money saving and making money tips and tools. https://www.thepennyhoarder.com/subscribe/ Join The Penny Hoarder Community: https://community.thepennyhoarder.com/ For more money saving tips, visit https://thepennyhoarder.com/ Watch More Videos: null Follow Us: Facebook: http://facebook.com/thepennyhoarder Twitter: https://twitter.com/thepennyhoarder Pinterest: https://pinterest.com/thepennyhoarder Instagram: @thepennyhoarder Snapchat: thepennyhoarder #ThePennyHoarder #LessMoneyStress #PersonalFinance