Protopapadakis says increasing the federal funds rate is a roundabout way for the Federal Reserve to regulate economic activity and combat inflation.  When interest rates rise, your finances may be affected in numerous ways. You might see mortgage rates or insurance increase. "Companies borrow less. Individuals borrow less. Housing values don't go up as much, and it's harder to borrow against it. That slows down economic activity, and that slows down inflation eventually," explains Protopapadakis.