US consumers and businesses are now facing a future of more expensive borrowing

Photo: Federal Reserve Chair Kevin Warsh delivers remarks at his swearing-in ceremony in the East Room of the White House, Friday, May 22, 2026. (Official White House Photo by Daniel Torok) Attribution: “P20260522DT-1159” by The White House via Flickr. United States Government Work. Article by John W. Diamond. The Conversation – September 16, 2026.

From mortgages to auto loans to credit cards, borrowing is set to get even pricier. But the Federal Reserve’s decision on Sept. 16, 2026, to hike its baseline interest rate also highlighted an increasingly confounding dilemma: It can raise the price of money across the economy, but it can’t determine which sectors are most affected. That means the rate increase may further slow the weaker parts of the economy, such as housing, while barely affecting the strongest, namely the relentless investment in artificial intelligence. […]

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