The Federal Reserve raised its benchmark interest rate by a quarter percentage point on Sept. 16, bringing the federal funds rate target range to 3.75%–4%. The move marks the Fed’s first rate increase since July 2023. The Fed said that the increase is intended to support a return to its 2% inflation goal. Higher benchmark rates can affect borrowing costs for businesses and consumers. If you have variable-rate debt or are considering financing, now may be a good time to review your borrowing strategy and cash flow. Remember that businesses usually can claim a tax deduction for interest expense up to applicable limits. Individuals may be able to deduct interest, depending on the type of debt.
