The Federal Reserve is widely expected to maintain its current interest rates during its upcoming policy meeting, despite political pressure from President Donald Trump, who has criticized Fed Chair Jerome Powell for keeping borrowing costs high. Market indicators show little expectation of a rate cut anytime soon. Economists suggest that Americans won’t see financial relief until at least September, even as many households continue to struggle with inflation and expensive credit.
Credit card interest rates remain a major burden for consumers. Although the Fed hasn’t raised rates recently, average credit card APRs hover above 20%, close to record highs. Experts recommend that borrowers with good credit take matters into their own hands by transferring balances to zero-interest cards or consolidating their debt to lower-cost loans instead of waiting on the Fed to act.
The housing market hasn’t benefited either. Mortgage rates have stayed around 6.9% due to their connection to Treasury yields and overall economic trends rather than the Fed’s decisions. With high rates and a nationwide shortage of available homes, affordability remains a challenge for potential buyers, particularly during the peak summer shopping season.
Auto loan rates, though not directly tied to the Fed, have climbed amid rising car prices — partly a result of Trump’s trade policies. The average five-year car loan rate is now 7.24%, and nearly one in five households with car loans are paying more than $1,000 a month. Consumers are advised to shop around for financing before heading to dealerships to offset some of the cost pressures.
On a more positive note, savers are benefiting from the Fed’s current stance. Online savings accounts are still offering yields above 4%, allowing those with funds in competitive accounts to earn decent returns. While student loan rates remain fixed and unaffected by rate changes, borrowers continue to face challenges due to limited relief options and rising costs.
Source: CNBC