When the Fed raises or lowers short-term interest rates, the impact doesn't ripple evenly through the economy. Different interest rate-related products will behave in different ways leading up to, and in response to, a Fed rate increase or decrease. Here's a look at how quickly your budget will take a hit, or benefit because of the Fed interest-rate moves.

What do Fed rate moves mean?

Mortgages Home Equity Auto loans CDs MMAs Credit Cards Mortgages Adjustable-rate mortgages • Rates on ARMs are primarily tied to short-term indexes, such as LIBOR, the one-year Treasury or the 11th District Cost of Funds. The one-year Treasury and the LIBOR tend to pretty quickly follow moves in the federal funds rate; the Cost of Funds lags a bit. • As the Fed boosts or cuts short-term rates, ARMs are far more sensitive after the fact than fixed-rate mortgages.   Conclusion: ARMs are sensitive to Fed rate changes. Fixed-rate mortgages • Fixed mortgage rates aren't directly tied to Fed interest rate moves. Instead, they're closely tied to long-term government bond yields, such as the 10-year Treasury, which tend to move in accordance with the economic outlook and in advance of moves by the Fed.   Conclusion: Fed rate changes do not have much of an effect.   See mortgage rates in your area.