59%: bet rises that the Fed will raise rates after its chief speaks

WHAT HAPPENED

Kevin Warsh, head of the Fed, said that inflation in the U.S. has not yet improved fundamentally. After speaking, the probability of a rate hike on September 16 rose from 35% to 59%. The current rate is 3.50%.

WHY IT MATTERS

If the Fed raises the rate to 3.75%, borrowing money could become more expensive: mortgages, credit cards, auto loans, and business loans. Construction, consumption, and businesses feel it first. The dollar could also strengthen and the peso or real could weaken.

AND FOR YOUR PORTFOLIO

For a long-term portfolio, higher rates usually pressure stocks, credit, and currencies outside the U.S. They can also change the value of international investments. In daily life, the impact may come as more expensive loans or heavier credit purchases.