Consumers who have been waiting for borrowing costs to drop will have to keep waiting: With inflation elevated, the Federal Reserve is expected to keep interest rates unchanged on Wednesday, a stance it has held since December.
“The Fed is in wait-and-see mode, and that likely means no immediate rate cuts,” said Matt Schulz, chief consumer finance analyst at LendingTree, an online loan marketplace. “Until inflation shows more consistent, sustained progress, borrowers shouldn’t expect any meaningful help from the Fed.”
Since the U.S.-Israeli-led war with Iran began in February, oil prices have surged, reigniting inflation, which the Fed was already struggling to bring back to its 2 percent target. At the same time, the job market, after showing signs of softening, appears relatively solid for the moment. The conflicting signals have complicated the Fed’s job, which is to keep prices relatively stable and unemployment low.
After a series of rate reductions last year, the Fed paused its cuts and is expected to keep rates at a range of 3.5 to 3.75 percent. Policymakers are unlikely to pivot to rate cuts unless the job market shows stronger evidence of weakening.
Here’s where various consumer rates stand now:
Mortgage Rates
Rates on 30-year fixed-rate mortgages don’t move in tandem with the Fed’s benchmark rates; instead, they generally track with the yield on 10-year Treasury bonds, which is influenced by a variety of factors, including the Fed’s actions, expectations about inflation and general investor sentiment.
Mortgage rates have been volatile. In late February, they fell below 6 percent for the first time in more than three years, but reversed course after the U.S.-Israeli attacks on Iran, given the likelihood of higher inflation. That sent yields on the 10-year bond higher, which, in turn, pushed up mortgage rates.
In recent weeks, mortgage rates have been trending lower again: The average rate on a 30-year fixed mortgage was 6.23 percent as of April 23, according to Freddie Mac, down from 6.3 percent the week before and 6.81 percent a year ago.
“Rates currently stand at their lowest level in the last three spring home-buying seasons,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “This improvement, coupled with a pickup in purchase applications and refinance activity, as well as an increase in monthly pending home sales, underscores signs of improving momentum in the market.”
Other home loans are more closely tethered to the central bank’s decisions. Home-equity lines of credit and adjustable-rate mortgages, which carry variable interest rates, generally adjust within two billing cycles after a change in the Fed’s rates.
Credit Cards
Cardholders carrying balances have seen the rates they pay on their debt decline ever so slightly over the last several months, but not enough to meaningfully affect their monthly budgets. (When the Fed cuts rates, card issuers are generally slower to act, and changes could take a couple of billing cycles.)
Last week, the average interest rate on credit cards was 19.57 percent, according to Bankrate, which tracks more than 100 popular new card offerings by the largest 50 banks. That’s down from 20.79 percent in August 2024, the highest rate since 1985.
Auto Loans
Higher car prices, combined with elevated loan rates, continue to strain affordability for many Americans, while many lower-income households are struggling to make payments on the auto loans they already hold.
Many car loans tend to track the yield on the five-year Treasury note, which is influenced by the Fed’s rate moves. But other factors determine how much borrowers actually pay, including credit history, the type of vehicle, the loan term and the down payment. Lenders also consider the levels of borrowers becoming delinquent on auto loans. As those move higher, so do rates, which makes qualifying for a loan more difficult, particularly for people with lower credit scores.
The average rate on new car loans was 7.0 percent in March, according to Edmunds, an auto research and shopping website, up from 6.5 percent at the end of last year but down from 7.2 percent in March 2025.
Rates for used cars were higher: The average loan carried an 11 percent rate in March, up from 10.5 percent at the end of the year but down from 11.5 percent in March 2025.
Savings Accounts
Everything from online savings accounts and certificates of deposit to money market funds tend to move in line with the Fed’s policy changes. High-yield savings accounts have fallen a bit from their most recent highs roughly two years ago, but they still pay far more than rates for traditional savings accounts, which remain anemic.
The national average savings account rate was recently 0.59 percent, according to Bankrate, while the best high-yielding savings accounts pay around 4 percent.
The average yield on the Crane 100 Money Fund Index, which tracks the largest money-market funds, was 3.47 percent as of April 27, down from 3.73 percent on Dec. 9 and 5.13 percent at the end of last June.
Student Loans
There are two main types of student loans: federal and private.
Most people turn to federal loans first. Their interest rates are fixed for the life of the loan, they’re easier for teenagers to get, and the repayment terms are more generous.
Last year, rates on federal student loans, for money borrowed from July 1, 2025, through June 30, 2026, dropped modestly. (These rates reset on July 1 each year and follow a formula based on the 10-year Treasury bond auction in May.)
Undergraduate loans now carry a rate of 6.39 percent, down from 6.53 percent a year earlier. Rates on loans for graduate and professional students eased to 7.94 percent, from 8.08 percent, while rates on PLUS loans — extra financing available to graduate students and to parents of undergraduates — fell to 8.94 percent, from 9.08 percent.
Private student loans are more of a wild card. Undergraduates often need a co-signer, rates can be fixed or variable, and much depends on your credit score.
Source:
www.nytimes.com
