Economy

High interest rates boost state savings

For many, the earnings jump last year was the largest in a generation.
The Federal Reserve building in Washington. (AP Photo/Patrick Semansky)

States are earning hundreds of millions of extra dollars in interest on cash holdings and short-term investments as the Federal Reserve raises interest rates.

The states’ interest earnings are small relative to their overall spending. But the additional money could still help cover the rising cost of government services, state officials and public finance experts say.

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