In an effort to blunt decades-high inflation, the Federal Reserve earlier this week announced a rare half-point interest rate hike and green-lighted plans to shrink its $9 trillion asset portfolio starting next month.

“Inflation is much too high and we understand the hardship it is causing,” Federal Reserve Chairman Jerome Powell stated in his news conference. “We’re moving expeditiously to bring it back down.”

The fifty-basis point hike, the largest increase the central bank has instituted in twenty-two years, now puts the key benchmark federal funds rate at a range between 0.75 percent and 1 percent, the highest level since the pandemic began more than two years ago. But it also appears that the Fed is far from done. According to the latest data from the CME Group, current market pricing has the rate surging to 2.75 percent to 3 percent by the end of the year.

As the federal funds rate essentially controls the amount that banks charge each other for short-term borrowing—serving as a signpost for many forms of consumer-related debt—the already-lean pocketbooks of many Americans will surely be impacted.

Exactly how much? As reported by personal finance writer Aimee Picchi at CBS News, “every 0.25 percent increase equates to an extra $25 a year in interest for $10,000 in debt. So, a fifty basis point increase will translate into an extra $50 of interest for every $10,000 in debt.”

According to LendingTree credit expert Matt Schulz, many consumers will feel the rate hike through their credit cards.

“Your credit card debt is going to get more expensive in a hurry, and it's not going to stop anytime soon,” he told the news outlet, adding that after the Fed’s March hike, interest rates on credit card debt increased across three-quarters of the 200 cards that he reviews every month.

It’s also worth mentioning that mortgage rates, already at the highest level since 2009, might have more room to run—pricing out even more potential homebuyers, especially first-time ones. The average rate on the popular thirty-year fixed mortgage started this year at 3.29 percent and reached a knee-buckling 5.64 percent on Friday, according to Mortgage News Daily.

“Many economists forecast another rate hike of fifty to seventy-five basis points in June to aggressively combat inflation,” John Thomas, partner at Cassin & Cassin LLP, a New York City-based firm that specializes in real estate, told Bankrate.com.

“That’s why I foresee that the thirty-year fixed-rate mortgage could easily rise to between 5.75 percent and 6 percent by the end of May,” he continued.

Rising rates, however, aren’t entirely bad news for all Americans—people will soon begin noticing higher yields in their savings accounts and certificates of deposit. In April, the average yield of savings accounts was 0.54 percent, while five-year CDs returned 1.7 percent.

“Rate increases are likely to accelerate after the highly anticipated May Fed rate hike,” Ken Tumin, of DepositAccounts.com, told CBS News.

Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.