The federal reserve is likely to hold interest rates steady next week. Here’s what that means for your money

The Federal reserve is expected to hold Interest Rates Steady at the end of its two-day meeting next week, Despite President Donald Trump’s comments Thursday that he’ll “demand that interest rates drop immediatily.”

So far, The Central Bank has Moved Slowly To recalibrate policy after hiking its Key Benchmark 5.25 Percentage Points Between 2022 and 2023 in an effort to fight inflation, which is still Running Above the fed’s 2% mandate. On the Campaign Trail, Trump said inflation and high interest rates are “Destroying our country,

But for Consures Struggling under the weight of high prices and high borrowing costsThere is a little reliable, for now.

“Anyone hoping for the fed to ride in as the cavalry and rescue you from high interest rates anytime song is going to be really disappointed,” said matt schulz, lendingtree’s chiff credit analyst.

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The federal funds rate, which the US Central Bank Sets, 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 Consures see every day.

Once the furds rate Eventually comes down, consucers may see their borrowing costs decrease whats Various Loans Such as Mortgages, Car Loans and Credit Cards, Making Itaper to Borrow Money.

Here’s a Breakdown of how it works:

SINCE MOST Credit cards Have a variable rate, there’s a direct connection to the fed’s benchmark. But even thought the central bank Cut Its Benchmark Interest Rate By a full percentage point last year, credit card costs remained elevated.

Card Issuers are often Slower to Respond to Fed Rate Decreases Than to Increases, Said Greg McBride, Bankrate’s Chief Financial Analyst.

Currently, the average credit card rate is more than 20%, according to bankrate – Near an all-time high,

In the meaning, delinquencies are higher and the share of credit card holders Making only minimum payments on their bills recently jumped to a 12-year high, according to a Philadelphia federal reserve Report.

“That means it is maybe more important than ever to get high-interest debt under control,” Schulz Said.

MortGage Rates Have Risen in recent months, even as the fed cut Rates.

Because 15- And 30-Year Mortgage Rates are fixed and mostly tied to treasury yields and the economy, they are not falling in step with fed policy. Since Most People Have Fixed-Rate Mortgages, their rate won’t unless unless they refinance or sell their current home and buy another property.

“Most MORTGAGE Debt is fixed, so existing homeowners are not impacted,” Bankrate’s McBride said. ” “It just adds to the affordability woes for would-be homebuyers and is kept home sales on ice.”

The average rate for a 30-yar, fixed-even mortgage is now 7.06%, according to bankrate.

Auto Loan Rates Are Fixed. But these debts are one of the fastest-growing sources of consumer credit outside of mortgage lending. Payments have been getting bigger trust Car prices Are Rising, Driving Outstanding Auto Loan Balancs to More Than $ 1.64 trillion,

The average rate on a five-yar new car loan is now Around 7.47%, according to bankrate.

“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

“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 , “Yoon said.

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.

As a result of the fed’s string of rate hikes in recent years, top-yielding online savings Accounts have offered the best returns in more than a decade and still pay near 5%, according to mcbride.

“The good thing about the fed being on the sidelines is that saves are going to be able to enjoy these inflation-beating yields for some time to come,” McBride said.

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