INDIANAPOLIS — When it comes to interest rates, there’s good news and bad news.

The good news is the Fed appears to be taking its foot off the gas with interest rate increases.  This month, the Federal Reserve Open Market Committee raised the federal funds rate to about 4.75%, up from 4.5% in January and 0.25% a year ago.

The federal funds rate is the rate that banks and other financial institutions pay when they lend money to each other as a means of maintaining mandated reserves of the funds they hold for their customers.  

While the rate hikes are slowing, there are more expected this year.  Experts widely predict another rate increase in March, followed by another possible hike in May.  However, many experts also anticipate the Fed will stop raising rates after that, and will possibly begin lowering them in the second half of the year.

In the meantime, rate increases are not good news for anyone who borrows money or invests in the stock market.  Increased rates that are passed on to consumers make it more expensive to finance a car loan.  They also push up credit card interest rates, which are already high right now.  Higher rates can also lower stock values.

Until rate increases stop and begin lowering, financial advisors say your best bet is to work to reduce as much personal debt as possible.