The federal reserve did not budge on interest rates. This is why this is a big problem

Federal Reserve In temporary interest rate discounts At today’s meeting. It is enough to say this Not The most interesting decision for 2025 until now.

However, given that the Federal Reserve reduced interest rates three times in 2024, we were hoping to get a path towards low borrowing costs. Last week, President Donald Trump said he would do He requests low interest rates Immediately.

The Federal Reserve is currently in a decade style. There is a lot of uncertainty about the policies of the incoming management, especially with regard to immigration and trade, to make any major political transformations.

While the Federal Reserve is expected to keep fixed interest rates for a period of time, anything can change in the next few months. Future decisions on interest rates will affect our financial resources, including the amount that we win from Savings accounts, How much is the additional we owe to carry it Credit card debts And whether we could have a car loan or a mortgage.

Here is the rapid introductory of interest rates and what the Federal Reserve decision may mean today for your money.

How the Federal Reserve sets interest rates

The Federal Reserve meets eight times a year to assess the health of the economy and develop monetary policy, in the first place through changes to the price of federal funds, and the standard interest rate that American banks use to lend or borrow money to each other overnight.

Imagine a position in which financial institutions and banks of the orchestra are formed, and the federal reserve is the conductor, directs the markets and controls the supply of money. So although the Federal Reserve does not place the percentage directly to us on Credit cards and Real estate loansHer policies have a ripple effect on the daily consumer.

The benefit is the cost that you pay to borrow money, whether through a loan or credit card. When the central bank increases interest rates, many banks tend to follow up. This can make the debt we carry more expensive (such as 22 % APR credit card for 17 % April), but it can also lead to that Optimized savings (A 5 % APY versus 2 % APY).

When the Federal Reserve reduces interest rates, three times last year, banks tend to have low interest rates as well. Our debts may become a little less complicated (albeit not much), and we will not get high a Hold our savings.

How inflation and labor market affect the Federal Reserve

Financial experts and market scenes spend a lot of time to predict the time of interest rates and snacks based on the direction of the economy, with a special focus on Economic inflation And the labor market.

Economists are concerned that the Trump administration is implementing policies that will distort inflation. Since economic activity has continued to expand and inflation remains somewhat high, it is unlikely that the Federal Reserve makes any interest rates until later this year.

In general, when inflation is high and the economy is more than that, the Federal Reserve is trying to pump the brake by setting higher interest rates and reducing the supply of money. Between March 2022 and July 2023, the Federal Reserve raised the rate of federal funds 11 times, helping to slow down high price growth.

However, the Federal Reserve risk if inflation decreases too much. Any rapid and rapid decrease in economic activity can cause a significant rise in unemployment, which leads to stagnation. The phrase “soft landing” may hear, which indicates the budget for maintaining inflation and unemployment is low.

The economy cannot be very hot or very cold. Like the porridge of Goldilocks, it should be completely correct.

What the federal reserve decision means today for your money

During the past few years, high credit interest rates and loans have made more expensive. Although the cuts in interest rates last year did not immediately improve our financial situation, the government’s monetary policy this year will definitely affect your long -term money.

This is what the decision today means APRS credit cardand Mortgage rates and Savings rates.

🏦 APRS credit card

Keeping the fixed federal funds may impose fees on the same annual percentage rate on your existing balance every month. However, each source has different rules about changing APRS.

“Some APRS credit cards decreased slightly after the FBI price discounts last year, but they are really high. Even if you could not pay the full balance, try to make more than the minimum payment every month to avoid more benefit.– Tiffany ConnorsCNET money editor

🏦 Mortgage rates

The Federal Reserve Decisions affect the total borrowing costs and financial conditions, which in turn affect the housing market Home loan pricesAlthough this is not an individual relationship.

“Although the Federal Reserve keeps the interest calories fixed, the mortgage prices will continue to volatility in response to new economic data and political advertisements. In order for the Fed Reserve Bank to reserve the reduction in interest rates and for decline, further progress is needed in inflation. Until then, then . The mortgage rates tend to rise quickly and slowly decrease. – Catherine WattCNET Money Housing Reporter

🏦 Savings rates

Variable savings rates move in Lockstep with federal funds, so the annual percentage may decrease after more price cuts later this year. Just remember that not all banks are created equally, and we follow regularly The best high -yield savings accounts and Deposit certificates In cnet.

“A temporary pause means that we do not want to see any major change in APYS for the CD and the savings calculation, at least at the present time. This gives savings more time to increase their profits by locking at a highly compressed disk rate or benefit from the high savings rates while still present “. – Kelly ErnestCNET money editor

What is the next for interest rate discounts

Experts expect price discounts at some point in 2025, although market and economists usually have different opinions about the cash decisions of the Federal Reserve Mobilization. The frequency of reducing interest rates depends on the labor market, inflation and other political and financial developments.