Get the Facts: What a Fed rate cut could mean for your wallet
The Federal Reserve is expected to announce a rate cut Wednesday. Here's how it can affect your loans.
The Federal Reserve is expected to announce a rate cut Wednesday. Here's how it can affect your loans.
The Federal Reserve is expected to announce a rate cut Wednesday. Here's how it can affect your loans.
After nine months of holding its key interest rate steady, the Federal Reserve is expected to announce a rate cut Wednesday. Federal Reserve Chair Jerome Powell and other Fed policymakers have signaled potential rate cuts over concerns about weaker hiring.
The U.S. Labor Department released a revision to its job numbers last week that showed employers added 911,000 fewer jobs than originally reported in the year that ended in March 2025.
The Get the Facts Data Team examined how the Federal Reserve's actions impact the average person.
The Federal Reserve creates monetary policies to stabilize the economy, and one of the ways it does this is by setting the federal funds rate. This is the interest rate banks charge each other for overnight lending.
When the Federal Reserve wants to stimulate the economy, it lowers interest rates, which makes it less expensive to borrow money. The impact of lower interest rates could be seen in other loans like credit card plans, personal loans, auto loans and, to a certain extent, mortgages.
Scroll the chart below to see how trends in each loan correspond to the federal funds rate.
The increase or decrease in loans is still subject to other factors. For instance, banks may absorb the increase or decrease of these interest rates. While credit card annual percentage rates are directly affected by changes to the federal funds rate, this only applies to a variable-rate credit card.
Mortgage rates may not see an immediate drop as these tend to move with the 10-year Treasury note because both are long-term investments.