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The spring of 2020 marked the start of the COVID-19 pandemic and ushered in a period of economic instability across the nation. Inflation reached a 40-year high in 2022, prompting the Federal Reserve to raise its target rate in an effort to tame rising prices.
As the Fed worked toward achieving its target inflation rate of 2%, it raised rates 11 times. As a result, it’s become more expensive for Americans to borrow money. However, higher interest rates have benefited savers, providing higher returns on deposit accounts and other fixed-income investments.
With a presidential election just around the corner, you might wonder how much influence the incoming president will have over interest rates. Here’s a look at the president’s role in interest rate decisions, and what it means for your bank account when the powers that be choose to raise or lower rates.
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