The US Federal Reserve has raised interest rates by 0.25 percentage point, taking its benchmark federal funds rate to 3.75%-4%. The move is aimed at slowing inflation by making borrowing more expensive and reducing spending.
Because they are hit hardest by rising prices, as cited by Yahoo Finance, he said stable prices are particularly important for lower-income Americans. Starting August 5, the company increased some plan prices by $10-$20 and raised a monthly per-line fee by another $1.
Fed Chair Kevin Warsh has said the central bank has “no tolerance for persistently elevated inflation. The rate hike is bad news for many borrowers but can help savers. People with new loans or variable-rate debt could pay more interest, while people putting money into savings accounts or CDs could get higher returns. AT&T also raised prices on some older plans.
Data centers add to energy demand
A Bank of America report found that the average utility bill rose 5.3% year over year in August. That was higher than the 4% annual increase in electricity and piped-gas prices. The US Energy Information Administration expects commercial and industrial electricity consumption to rise 4%, which will require more investment in power generation and grid capacity.
Bank of America said some of those infrastructure costs could eventually be passed on to consumers through higher energy bills. Bank of America said the El Niño weather pattern could bring warmer temperatures and lower energy demand, potentially reducing some energy bills. Utility bills are increasing faster than overall inflation in some parts of the US. The rise came after the US experienced its hottest summer on record. Some cities saw utility bills decline instead. San Jose, Orlando and Tampa recorded lower bills during the same period. More electricity demand could keep pressure on utility bills. There could be some short-term relief for utility customers.
Energy bills made up about 3% of total household spending in 2024. This means higher utility costs can put additional pressure on household budgets. Utility-price increases differ widely across the country. In the Northeast, investment in the power grid and additional capacity has pushed prices higher.
