Federal Spotlight: Fed raises interest rates

Wednesday’s move by the Federal Reserve to lift its key rate, the federal funds rate, by a quarter-point to a range of 0.25 percent to 0.5 percent ends an extraordinary seven-year period of near-zero rates that began at the depths of the 2008 financial crisis. The Des Moines Register reported that “one possible weakness for Iowa with this increase is its dependence on exports. Iowa exported about $15 billion worth of goods in 2014, including corn and machinery manufactured in the state. An increase in interest rates could strengthen the standing of the dollar, a good sign for U.S. travelers abroad, but one that makes goods made inside the country more expensive”. This rate can also affect consumers through mortgages, credit cards and car loans. The Fed signaled any additional hikes would be made slowly as the economy strengthens.