Following the Federal Reserve's most recent meeting on June 17, 2026, it appears increasingly likely that the Fed's next move will be to raise interest rates rather than cut them. New Federal Reserve Chairman Kevin Warsh underscored that possibility with a clear commitment to fighting inflation, stating:

"The Committee will deliver price stability."

He went on to acknowledge:

"We've missed for five years, and we're going to fix that."

Those comments suggest the Fed's primary focus remains controlling inflation, even if that means maintaining higher interest rates for longer or raising rates further. While interest rate policy can seem like an abstract topic discussed by economists and financial markets, Fed decisions ultimately affect nearly every consumer.

Interest rates have the ability to impact consumer spending, saving, the economy, inflation and so much more. But how exactly do they work and how do they impact you? Here’s everything you need to know about the advantages and disadvantages of high interest rates – and low.