The Federal Reserve just raised interest rates, but what does that mean for the everyday consumer? Most should know that the Fed doesn’t directly set interest rates for mortgages, auto loans, credit cards of other types of consumer financing, but that they are set separately as a result of Fed policy.

In mid-December, the Fed raised its benchmark federal funds rate from near zero to a range of 0.25% to 0.5%, signaling that rates might be on the rise in 2016.

Ultimately, borrowers shouldn’t expect rates to shoot skyward. In fact, the Fed is more likely to move slowly, at least in the near term.

The Federal Open Market Committee (FOMC), which sets the federal funds rate, expects that economic conditions will behave in a way that will warrant only gradual increases.

Still, that expectation isn’t a guarantee. The Fed also has expressed that its policy is heavily “data dependent,” meaning that if Chair Janet Yellen does not see the markets as fit for taking on a rate hike, she will postpone it.

Some analysts expect the FOMC to raise the federal funds rate as many as four times in 2016.

Next year has the potential to be a bumpy ride for fixed income. In 2016, many expect that the drivers of volatility will be the Fed and the economy.

Savers with certificates of deposit have been waiting for interest rates to rise for years. Now that the Fed’s move to incrementally raise the federal funds rate is in place, those savers can anticipate a tiny upward bump in CD rates.

However, Greg McBride, CFA, senior vice president and chief financial analyst at Bankrate, says most banks are likely to raise interest rates on loans while keeping CD rates low.

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