In the year since the Federal Reserve raised interest rates to more than 20-year highs, it has succeeded in cooling an overheating U.S. economy. But higher borrowing costs have also had some unintended effects. High-income households are benefiting from rising stock markets and home prices. Businesses are borrowing quickly and consumers are continuing to spend. But in other ways, a year of high interest rates is finally starting to take its toll. Americans are looking for jobs longer and unemployment has risen. Small businesses are feeling the pain of rising borrowing costs. Low-income households are defaulting on car loans and credit cards. "The economy has weakened over the past few months, and Fed officials will be very concerned about whether the economy starts to weaken more quickly," said Veronica Clark, an economist at Citigroup. This will cause officials to cut interest rates faster. "