Wednesday afternoon to leave interest rates alone for the first time in 11 meetings will raise hopes that it may be nearing the end of its rate-hiking campaign to cool inflation.
McBride noted that credit card rates, in particular, are at or near their all-time peaks, mortgage rates have more than doubled in two years and auto loan rates have reached their highest level in about a dozen years. Even if rates were to hold steady, borrowing costs across the economy will remain much higher than they were in recent years. Some consumers may struggle to continue making loan payments on time as they simultaneously face inflated prices for many goods and services.
“And they're probably going to still creep higher in the immediate future,” Schulz said, even if the Fed doesn't raise rates Wednesday. Prices for used vehicles also dropped somewhat last year but remain comparatively high. The national average in May was $29,387, down about 5% from the May 2022 peak but nearly $9,000 more than the average before the pandemic.