What Fed Interest Rate Cuts Means for Mortgages, Car Loans and More

7 months ago 67

You have a preview view of this article while we are checking your access. When we have confirmed access, the full article content will load.

Here’s what lowered interest rates will mean for your car loans, credit cards, mortgages, savings and student loans.

An illustration of a man in a Vitruvian position, holding a house, a car, a dollar bill and a credit card.

Sept. 17, 2024, 5:04 a.m. ET

The moment consumers have been waiting for is finally here: The Federal Reserve is poised to cut its key interest rate on Wednesday, and it’s likely to signal that more cuts will follow.

The only question is how much rates will decline from their current perch of around 5.33 percent, with some economists saying they could drop by as much as a full percentage point before the end of the year. This number doesn’t translate directly into what you’ll pay if you’re a borrower. If only credit card companies charged so little.

Still, this move should eventually bring interest rates down for many borrowers, even as it is likely to lower the rates that financial institutions pay out to savers.

Here’s what to watch for in five key areas of your financial life, as rates fall now — and hopefully (for borrowers at least) even more in the coming months.

Image

Once you establish your budget for a car, get preapproved for an auto loan through a credit union or bank. Credit...Scott Olson/Getty Images

Auto Rates

What’s happening now: Auto rates and car prices have been trending lower but they still remain elevated, making affordability a challenge. But dealerships are offering more incentives and discounts to attract buyers, and that’s expected to continue.

Thank you for your patience while we verify access.

Already a subscriber? Log in.

Want all of The Times? Subscribe.