“By increasing its benchmark rate a quarter of a point on Wednesday, the Federal Reserve is trying to rein in inflation, which is at a 40-year high. The mechanics are relatively straightforward: By raising its federal funds rate — the rate banks charge one another for overnight loans — the Fed sets off a domino effect. Whether directly or indirectly, a number of borrowing costs for consumers go up. In theory, this slows demand for goods and taps the brakes on inflation.” NYT: What a Federal Reserve Rate Increase Means for You.