While the Fed kept its benchmark unchanged, here's what happened to consumer borrowing rates
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Even while the Fed left its benchmark rate unchanged, many consumer rates have fluctuated over the first half of the year.
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real estate
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July 29, 2025
09:30 AM
CNBC
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Market analysis reveals Watch now6:2306:23Pres
Trump ramps up pressure on Fed Chair Powell: Here's what to knowSquawk BoxWhen it meets this week, the Federal Reserve is widely expected to keep its key short-term interest rate at its current target range — where it has stayed for all of 2025, amid market uncertainty
Futures market pricing is implying almost no chance of an interest rate cut this month, according to the CME Group's FedWatch gauge
Additionally, In that case, the federal funds rate would remain unchanged in a range between 4. 5%, where it has been since December
The Fed's benchmark sets what banks charge each other for overnight lending, but also has a trickle-down effect on many of the borrowing and savings rates consumers see in their daily s (fascinating analysis)
More from Personal Finance:Student loan forgiveness may soon be taxed againWhat the Fed's interest-rate decision could mean for your moneyHow to lower capital gains on your sale as Trump eyes ending the taxFrom mortgage rates and auto loans to credit cards and savings accounts, here's a look at how those rates have moved over the first half of the year while the Fed held its benchmark steady, in today's market environment
The trickle down from the Fed's benchmark interest rate appears most obvious in credit cards, although by the numbers it's a very slight change
Nevertheless, The average rate for credit card balances had been steadily increasing since the Fed began raising rates in 2022 until it finally crested just below 21% last fall, according to Bankrate
Since then, rates have nudged downward and have been hovering around 20. 1% for the first half of 2025 (fascinating analysis)
At the same time, Auto loans have also seen very little movement in the first half of 2025, and 30-year fixed rate mortgages, whose rates are more closely tied to the yield on 10-year Treasurys, have hovered between 6
Additionally, 1% after hitting a low near 6% last fall, according to Freddie Mac. 'No guarantee' of lower borrowing costsPresident Donald Trump has argued that maintaining a federal funds rate that is too high makes it harder for es and consumers to borrow, essentially pumping the brakes on economic growth and the housing market
Still, "there is no guarantee" that a rate cut would translate into lower borrowing costs for most Americans, according to Brett House, an economics fessor at Columbia School
Nevertheless, Some variable-rate loans, credit cards, have a direct connection to the Fed's benchmark, while others, mortgage rates, are more closely pegged to Treasury yields and the U
Economy, he said. "It's entirely ly that cuts to the fed funds rate in the face of increasing inflation would push mortgage rates up, not down. " to CNBC on YouTube (which is quite significant).
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