Fed rate hike likely to push up consumer credit costs

WASHINGTON (AP) — The Federal Reserve's interest rate "liftoff" Wednesday probably will nudge consumer credit costs higher, making carrying a balance on a home equity loan or credit card more expensive. But it isn't likely to push up long-term mortgage rates or even the cost of car loans right away, as the increase has little immediate influence on those forms of lending.

By raising the Fed funds rate by one-quarter of a percentage point, to 0.5 percent, policy makers finally ended months of speculation about whether and when they would start raising the overnight lending rate used by banks when they make loans of less than a day's duration to other banks. It has hovered near zero since the last recession as the central bank sought to foster economic expansion. The move Wednesday is the first step in returning the rate to a more normal level.