The federal reserve holds interested rates steady: here’s what that means for your money

The Federal reserve Announced Wednsday it will leave Interest Rates Unchanged as Inflation Continues to Run Above The Fed’s 2% Mandate.

The move come after the Central Bank Cut Its Benchmark Interest Rate By a full percented point last year and in the wake of president Donald Trump‘s comment DURING his first week back in office that he’ll “demand that interest rates drop immediatily.”

The latest CNBC Fed Surveyy Showed expectations for only two rates later in the year, the same number PENCILED In By Federal Reserve Officials in his recent forecasts,

“While Inflation Concerns have Significantly Abated, They Still Remain,” said Michele Raneri, Vice President and Head of Us Research and Consulting at transunion. “As a result, it is quite possible that there will be fewer rates over the course of next year than an anticipated only a few months ago.”

For Consures Struggling under the weight of high prices and high borrowing costsThat means there will be luck to come. It also means trump may further Challenge the fed’s independence,

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Inflation Has been an ongoing issue since the pandemic, when price increases soared to their highhest levels since the early 1980s. The Fed Responded With a Series of Interest Rate Hikes that Took Its Benchmark Rate to its highhest level in more than 22 years.

On the Campaign Trail, Trump said inflation and high interest rates are “Destroying our country,

The Federal Funds Rate, which is set by the US Central Bank, is the rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the fed’s movies stil Affect the borrowing and saving rates They see every day.

The spike in interest rates caused most consumer borrowing costs To skyrocket, putting many households under pressure.

Even thought the central bank has alredy started Cutting its benchmark rate and more rate reductions are on the horizonConsures Won’Te their borrowing costs come down significantly, according to Greg Mcbride, Bankrate’s Chief Financial Analyst.

“The rate cuts are not going to be big enough or often enough to do the heving lifting for you,” He said.

From Credit Cards and Mortgage Rates to Auto Loans and Savings Accounts, Here’s a look at where there are rates could go in 2025.

SINCE MOST Credit cards Have a variable rate, there’s a direct connection to the fed’s benchmark. In the wake of the rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to more than 20% today – Near an all-time high,

Annual Percentage Rates will continue to come down as the Central Bank Reduces Rates, but they are only Easing off extramely high levels. With only a less potential Quarter-Point Cuts on Deck, Aprs Aren Bollywoodly to Fall MUCH, According to Matt Schulz, Chief Credit analyst at lendingtree.

“Anyone hoping for the fed to ride in as the cavalry and rescue you from high interests anytime song is going to be really disappointed,” He said.

Try Consolidating and Paying Off High-Interest Credit Cards with a Lower-Interest Personal Loan Or switching to an interest-free balance transfer credit card, Schulz Advised: “A 0% Balance Transfer Credit Card Can Be an Absolute Lifesver.”

Although 15- And 30-YAR MortGage Rates are fixed, and tied to treasury yields and the economy, anyone shopping for a new home has lost considerable purchase power, partly believes of infection and the fed’S

The average rate for a 30-yar, fixed-even mortagage is now just Above 7%According to bankrate.

Going forward, mcbride expects MortGage Rates to “Spend Most of the year in the 6% range,” He said. But since Most People Have Fixed-Rate Mortgages, Their Rate Won’T Change Unless They Refinance or Sell their Current Home and Buy Another Property.

Even thought Auto Loans Are Fixed, Payments are gotting bigger and Less affordable beCause Car prices Have been rain with the interest rates on new loans.

The average rate on a five-yar new car loan is 5.3%, according to January data from edmunds compiled for CNBC.

“With the fed signaling that any rate cuts in 2025 will be gradual, affordability challenges are likely to personal for most new vehicle boys,” Said Joseph Yoon, Edmunds’ CONSUMURDS ANALYSTS ANALYSTS ANALYSTS ANALYSTS

“The average transaction price of a new vehicle remain $ 50,000, driving average loan amounts to record highs,” He said. “Although Further Rate Cuts in 2025 Block Provide Some Relief, The Continued Upward Trend in New Vehicle Pricing Makes It Difential to AnatiCipate Significant Improverts In AFFORDABITY FOR . ”

Federal Student Loan Rates Are also fixed, so most borrowers are immediatily affected by any fed moves.

However, undergraduate students who took out direct federal students loans for the 2024-25 Academic year are paying 6.53%UP from 5.50% in 2023-24. Interest rates for the upcoming school year will be based in part on the may auction of the 10-Year Treasury Note,

Private Student Loans Tend to have a Variable Rate Tied to the Prime, Treasury Bill or Another Rate Index, Which means that means borrowers are typical Paying more in Interest. How Much more, however, varies with the benchmark.

While the Central Bank has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate.

In recent years, top-yielding online savings Accounts have offered the best returns in more than a decade and still pay near 5%.

“While the fed putting the brakes on interest rates stinks for that with debt, it is welcome news for saves,” Schulz said. “That means that it is still a high-yield Savings account. Sure, you’ve missed out on the peak, but there are still plastic of good returns to be found.”