(NewsNation) — American families are feeling the impact of what’s happening on Wall Street.

The Federal Reserve is expected Wednesday to announce its largest interest rate hike since 1994 — a bigger increase than it had previously signaled and a sign that the central bank is struggling to restrain stubbornly high inflation.

The central bank is considered likely to raise its benchmark short-term rate by three-quarters of a percentage point, far larger than the typical quarter-point increase, to a range of 1.5% to 1.75%. It will also likely forecast additional large rate hikes through the end of the year.

Borrowers will feel the pinch.

NewsNation business contributor Lydia Moynihan explained what the hike in interest rates would mean for borrowers. If a borrower has a mortgage payment, credit card payment or car payment, they are going to be paying more money.

People will be less inclined to borrow money, and more inclined to put money in their savings. That’s why people are paying close attention to how much the Federal Reserve could raise interest rates.

However, 70% of Americans are dipping into their savings to cover increasing costs due to rising inflation. More people feel as though their finances are worse now than they were a year ago. An increased number of people also think they may miss a minimum debt payment over the next three years as a result.

The average person has about $5,300 in their savings account, but they spend about $5,111 per month. That’s about a $200 difference, and that’s only if you don’t have any unexpected expenses.

On average, if you were saving $500 per month 10 years ago, you would need to be saving about $647 per month now in order to have the same spending power.

The Associated Press contributed to this story.