{"id":16773,"date":"2025-06-16T19:35:30","date_gmt":"2025-06-16T19:35:30","guid":{"rendered":"https:\/\/finderica.com\/?p=16773"},"modified":"2025-06-16T19:35:30","modified_gmt":"2025-06-16T19:35:30","slug":"what-that-means-for-you","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=16773","title":{"rendered":"What that means for you"},"content":{"rendered":"
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U.S. President Donald Trump looks on as Fed Chair Jerome Powell speaks at the White House in Washington on Nov. 2, 2017.<\/p>\n

Carlos Barria | Reuters<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Political pressure is mounting against the Federal Reserve Chair Jerome Powell, and yet the\u00a0Fed\u00a0is expected to hold\u00a0interest rates\u00a0steady at the end of its two-day meeting this week.<\/p>\n

Despite a wave of recent attacks on Powell\u00a0from President Donald Trump, futures market pricing is implying\u00a0virtually no chance of an interest rate cut, according to the CME Group’s\u00a0FedWatch<\/a>\u00a0gauge.<\/p>\n

The president has argued that maintaining a federal funds rate that is too high makes it harder for businesses and consumers to borrow, adding more strain to the U.S. economy.\u00a0The fed funds rate sets what banks charge each other for overnight lending, but also\u00a0affects many of the borrowing and savings rates\u00a0most Americans see every day.<\/p>\n

More from Personal Finance:<\/strong>
Here’s the inflation breakdown for May 2025
What’s happening with unemployed Americans \u2014 in five charts
The economic cost of Trump, Harvard battle over student visas<\/p>\n

With a rate cut likely postponed\u00a0until at least September, consumers struggling under the weight of high prices and high\u00a0borrowing costs\u00a0aren’t getting much relief, experts say.\u00a0<\/p>\n

“The combination of high interest rates, stubborn inflation and economic uncertainty is a pretty challenging one,” said\u00a0Matt Schulz, chief credit analyst at LendingTree.\u00a0“Most Americans don’t have a ton of wiggle room and today they have even less.”<\/p>\n

From credit cards and mortgage rates to auto loans and savings accounts,\u00a0here’s a look at how the Fed plays a role in your finances.<\/p>\n<\/div>\n

<\/a>Credit cards<\/h2>\n
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Credit card debt continues to be a pain point for consumers struggling to keep up with high prices. Since most\u00a0credit cards\u00a0have a variable rate, there’s a direct connection to the Fed’s benchmark.<\/p>\n

But even with the central bank on the sidelines, credit card rates have edged higher. The\u00a0average annual percentage rate is currently just over 20%, according to Bankrate, not far from last year’s all-time high<\/a>.\u00a0<\/p>\n

“This is a sign of banks trying to protect themselves from the risk that is out there in these uncertain times,” Schulz said. However, in this case, there is something consumers can do about higher APRs.<\/p>\n<\/div>\n

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“The truth is that people have way more power over the rates they pay than they think they do, especially if they have good credit,” Schulz said.<\/p>\n

Rather than wait\u00a0for a rate cut that may be months away, borrowers could switch now to a zero-interest balance transfer credit card or consolidate and pay off high-interest credit cards with a lower-rate\u00a0personal loan, he said.<\/p>\n<\/div>\n

<\/a>Mortgages<\/h2>\n
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Since 15- and 30-year mortgages are largely tied to Treasury yields and the economy, those rates haven’t moved much \u2014 and that hasn’t helped would-be buyers.<\/p>\n

The average rate for a 30-year, fixed-rate mortgage has stayed within the same narrow range for months and is\u00a0currently near 6.9%, according to Bankrate. Tack on the nationwide problem<\/a> of limited inventory and housing affordability<\/a>\u00a0remains a key issue, regardless of the Fed’s next move.<\/p>\n

“I don’t see any major changes coming in the immediate future, meaning that those shopping for a home this summer should expect rates to remain relatively high,” Schulz said.<\/p>\n<\/div>\n

<\/a>Auto loans<\/h2>\n
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Auto loan rates\u00a0are fixed, and not directly tied to the Fed. But payments are getting bigger because\u00a0car prices\u00a0are rising, in part due to impacts from Trump’s\u00a0trade policy.<\/p>\n

Currently, the average rate on a five-year new car loan is 7.24%, according to Bankrate.<\/p>\n<\/div>\n

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The growth in median car payments is outpacing both new and used car prices, according to separate data from Bank of America. Now, of those households with a monthly car payment, 20% pay more than $1,000 a month<\/a>.<\/p>\n

“Combine that with the potential for tariffs to drive auto prices even higher, and it adds up to a really challenging time to buy a car,” Schulz said. “However, shopping for the best rate and getting approved for financing before you ever set foot in the dealership can bring significant savings,” he added.<\/p>\n<\/div>\n

<\/a>Student loans<\/h2>\n
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Federal student loan rates\u00a0are set once a year, based in part on the last\u00a010-year Treasury note auction in May and fixed for the life of the loan, so most borrowers are somewhat shielded from Fed moves and recent economic turmoil.<\/p>\n

Current interest rates on undergraduate federal student loans made through June 30 are at 6.53%. Starting July 1, the interest rates will be 6.39%.<\/p>\n

Although borrowers with existing federal student debt\u00a0balances won’t see their rates change, many are now facing other headwinds and fewer\u00a0federal loan forgiveness\u00a0options.<\/p>\n<\/div>\n

<\/a>Savings<\/h2>\n
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On the upside, top-yielding online\u00a0savings\u00a0accounts still offer above-average returns and currently pay more than 4%, according to Bankrate.<\/p>\n

While the central bank has no\u00a0direct influence\u00a0on deposit rates, the yields tend to be correlated to changes in the target federal funds rate \u2014 so holding that rate unchanged has kept savings rates elevated, for now.<\/p>\n

“The thing that is lost in this, is that savers, including millions of retirees, are actually earning good income on their savings, provided they have their money parked in a competitive place,” said Greg McBride, Bankrate’s chief financial analyst.<\/p>\n<\/div>\n

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Don\u2019t miss these insights from CNBC PRO<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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U.S. President Donald Trump looks on as Fed Chair Jerome Powell speaks at the White House in Washington on Nov. 2, 2017. Carlos Barria | Reuters Political pressure is mounting against the Federal Reserve Chair Jerome Powell, and yet the\u00a0Fed\u00a0is expected to hold\u00a0interest rates\u00a0steady at the end of its two-day meeting this week. Despite a<\/p>\n","protected":false},"author":1,"featured_media":16774,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[435],"class_list":{"0":"post-16773","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-means"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/16773","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16773"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/16773\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/16774"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16773"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16773"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}