KeyCorp raises prime rate after Fed decision

U.S. bank KeyCorp raised its prime lending rate on Wednesday after the Federal Reserve adjusted its benchmark interest rate, a move that is set to raise borrowing costs for consumers and businesses.

The Cleveland, Ohio-based lender has raised its prime lending rate to 7% from 6.75%, effective Thursday, following the Fed's first interest rate hike since 2023.

The prime rate, which typically follows the federal funds rate, is used by U.S. banks as a reference for setting rates on many financial products such as credit cards and personal loans.

The Fed raised interest rates by a quarter of a percentage point on Wednesday as policymakers focus on addressing persistent inflation.