The Federal Reserve is expected to announce no rate hike at the end of its two-day meeting next week.Here’s a breakdown of how the Fed's moves have impacted your mortgage rate, credit card bill, auto loan and student debt.
The federal funds rate, which is set by the U.S. central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that's not the rate consumers pay, the Fed's moves still affect the borrowing and savings rates they see every day.Even without a rate hike, APRs may continue to rise, according to according to Matt Schulz, chief credit analyst at LendingTree.
The average rate for a 30-year, fixed-rate mortgage is up to 8%, the highest in 23 years, according to Bankrate."Rates have risen two full percentage points in 2023 alone," said Sam Khater, Freddie Mac's chief economist. "Purchase activity has slowed to a virtual standstill, affordability remains a significant hurdle for many and the only way to address it is lower rates and greater inventory.", or HELOCs, are pegged to the prime rate.
The average rate on a five-year new car loan is now 7.62%, the highest in 16 years, according to Bankrate.are also fixed, so most borrowers aren't immediately affected by the Fed's moves. But undergraduate students who take out new direct federal student loans are now paying 5.50% — up from 4.99% in the 2022-23 academic year and 3.73% in 2021-22.
While the Fed has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate. The"Moving your money to a high-yield savings account is the easiest money you are ever going to make," McBride said.