Fed rates are likely to keep stable, but some borrowing costs are decreasing

The Federal Reserve is expected to keep the interest rates stable at the end of the two -day meeting next week, despite some encouraging news on inflation.

Although inflation began last month, a growing trade war is at risk of increasing prices on a wide range of consumer goods.

“It is likely to start with tariffs on Europe and universal people who follow the suit in the coming weeks,” Andrazage Skiba said in an email, head of US fixed income at RBC Global Asset Management, which follows suits in the coming weeks. ” “It will be inflation, and Fed will not be able to cut rates in this environment.”

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The Federal Fund sets the rate of what the banks charge for lending overnight, but also affects many lending and savings rates that see Americans every day.

“Consumers are extended and stressed,” said Greg Mcbrid, the chief financial analyst of Bankrate.com.

Once the rate of federal funds decreases, the consumer can see the cost of their borrowing a variety of consumer loans such as auto loans, credit cards and mortgage, which makes it cheaper to borrow money.

But even on the edge with the fed, the houses may get some relief. Already, rates for mortgage, auto loans and credit cards are decreasing. Nevertheless, these rates increase relatively compared to recent higher, with credit card APRS only slightly below an all -time record.

There is a look here where the cost of consumer borrowing is standing.

Although 15- and 30-year mortgage rates are fixed, and large-scale treasury yields and economy, rates are lower than weeks.

According to the Horticulture Bankers Association, an increase in uncertainty on a potential recession and President Donald Trump’s tariff schemes has sour and pulled down rates.

Landingter’s chief credit analyst Matt Shulz said, “The good news is that even though the Fed has taken off his foot from the gas, when it comes to the rate cut, the mortgage rates have fallen,” said the main credit analyst of the lending.

The average rate for 30 years, fixed-per hostage is now 6.77%, below 7.04% at the beginning of the year.

Most credit cards have a variable rate, so the fed has a direct connection with the benchmark.

But even though the central bank kept the rates in the last few meetings, but the average annual percentage rate is also reduced – it is currently from 20.27% to 20.09% at the beginning of the year, thanks to the impact of the rate cut in the previous year.

“March Sixth was straightly a monthly decline, but has decreased as the fed rate cut proceeds into the rearview mirror,” Shulz said about the credit card APRS.

Meanwhile, the credit card loan remains a pain point for consumers struggling to live with high prices. The revolving loan, which includes most credit card balance, is up to 8.2%, while nonwolving loans, such as auto loans and students are 3% more, According to the latest consumer credit report of Federal Reserve.

Although the auto loan rate is fixed, they keep increasing payment as car prices are increasing, in addition to the pressure of business policy uncertainty.

“This is a disturbing news for potential car buyers, which are already surrounded by high rates and high prices on all sides and face the possibility of increasing the cost of the car even more,” Shulz said.

However, auto loan rates have also retreated from recent high levels. The average rate on a five -year new car loan is now 7.42%, which is below 7.53% in January, according to the bank.

Federal student loan rates are fixed, as well, so most borrowers are somewhat melted with fed moves and recently economic turmoil.

Graduate students with direct federal student loans for 2024-25 academic year have increased from 5.50% to 6.53% in 2023-24. Interest rates for the upcoming school year will be based in part in the May auction of 10 years Treasury Note.

Private student loans have a variable rate associated with Prime, Treasury Bill or any other rate index.

On the contrary, top-top up online savings accounts have offered the best returns in more than a decade and currently, according to the banker, pay an average of 4.4%on an average.

While the Fed has kept the rates stable, “the savings rates have not really changed so much, it’s good news,” said the banker’s McBrid. “The savings rate is still at the attractive level and the top yield is still higher than inflation.”

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