Interest rates will keep rising in 2019, but a slowdown is on the horizon

Uncertainty looms ahead as we transition into 2019. But one thing remains clear: Borrowing costs — at least for now — are still going up.

The Federal Reserve rattled markets by raising its benchmark interest rate in December, bringing the total number of rate hikes in 2018 to four. Short-term interest rates will keep climbing, but the central bank signaled that there could be two interest rate increases this year instead of the three it previously projected.

Expect more volatility as the stock market responds to the daily news cycle, says Greg McBride, CFA, Bankrate’s chief financial analyst. It all depends on how trade talks with China play out, but in the first quarter, McBride says we’ll probably see a strong market rally of more than 10 percent followed by a return to bear market territory for the S&P 500. As the year progresses, the economy is expected to slow while fears of an impending recession will grow.

Though policymakers have suggested that the next Fed rate hike may not happen for another several months, borrowers with outstanding balances should be prepared to pay more out of pocket. Whether you’re struggling to get rid of high-interest credit card debt or preparing to buy a new house or car, here’s what rising interest rates could mean for your wallet.