Kebede: Fed activity likely to increase cost of borrowing

CUNA Senior Economist Dawit Kebede shared his thoughts on projected increases in credit card interest rates for an Bankrate article on the topic. These interest rates began to climb in 2021, a trend that will likely continue into 2022.

Kebede says the projected spike is partly driven by the Fed’s reduction of purchases of Treasuries and mortgage-backed securities, designed to keep interest rates at their current levels.

Phasing out that activity “will slowly increase the cost of borrowing,” Kebede said.