The Federal Reserve is stabilizing interest rates. What does that mean to you?

The Federal Reserve announced Wednesday that it would not change interest rates as President Donald Trump’s tariff policies focus on economic growth.

Inflation recedes last month, but the escalating trade war threatens to raise prices of consumer goods in the future.

“Taxes on aluminum, steel and oil are essential elements of the production of a wide range of products,” said Brethouse, professor of economics at the Columbia Business School. “These price increases will spill more widely across the US economy.”

Kevin Hassett, director of the National Economic Council, recently warned of “uncertainty” over the coming weeks due to US tariff agenda.

The risk of inflation caused by tariffs ensured that central banks would take a more cautious approach, according to the House. “The greater the world’s uncertainty means the Fed will become more predictable in standby mode,” he said.

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Federal fund rates set out what banks charge each other for lending overnight, but also affect many of the many borrowing and savings rates Americans see every day.

When the Fed hiked rates in 2022 and 2023, borrowing costs for most consumers quickly followed suit. The central bank began lowering its benchmark rate late last year, but consumer rates are still rising, with credit card annual rates falling slightly from an all-time high.

“The pressure on household budgets is merciless,” said Greg McBride, chief financial analyst at Bankrate.com.

If federal funding rates drop, consumers will also reduce their borrowing costs, and it could be cheaper to borrow money to buy a home or car.

But for now, even if the Fed is on the sidelines, consumers who struggle with the weight of high prices and high borrowing costs can see some relief, experts say. Mortgages, car loans and credit cards are already low.

Most credit cards have variable rates, so they are directly connected to the Fed’s benchmarks.

The central bank has been stable over the past few meetings, but the average annual rate has been eased. According to Bankrate, the average credit card rate has fallen to 20.09%, starting from 20.27% at the beginning of the year. That’s just after the rate reduction that’s already been enabled.

“Credit card fees have fallen from record highs in 2024,” said Matt Schultz, chief credit analyst at LendingTree. “March was the sixth monthly decline, but the decline fell as Bed rate cuts came back further in the rearview mirror.”

The 15- and 30-year mortgage rates are fixed, and these rates are also lower as the majority are tied to Treasury yields and the economy.

Uncertainty about tariffs and concerns about recession has lowered consumer outlook. “Mortgage rates are falling due to concerns about economic weakness,” McBride said.

But “it’s not the type of environment that provides a sustainable boost to the housing market,” he added.

According to Mortgage News Daily, the average rate for a 30-year fixed-rate mortgage is 6.78% as of March 19th, and the fixed-rate for 15-year is 6.24%.

Auto loan fees are fixed, but payments are growing as car prices rise in addition to pressure from Trump’s trade policy.

“The prices on stickers are still very high and tariffs just make these prices higher,” McBride said.

Auto loan fees have also been back down from recent highs, but are still being extended annually. According to Edmunds, the average five-year new car loan rate is 7.2% for the week ended March 14th, while the average used car loan rate is 11.3%. At the end of 2024, these prices were 6.6% and 10.8% respectively.

Federal student loan fees are also fixed, so most borrowers have some protection from the Fed’s moves and recent economic turmoil.

Undergraduates who earned direct federal student loans between 2024 and 25 will pay 5.50% to 6.53% in 2023 and 24. Interest rates for the next grade are based in part on the 2010 Ministry of Finance’s May auction.

Private student loans tend to have variable rates tied to Prime, Treasury bills, or another rate index.

The advantage is, “Savings rates haven’t really changed that much. That’s good news,” McBride said. “Savings rates remain attractive levels, and the highest yields are still well above inflation.”

While central banks do not directly affect deposit rates, yields tend to correlate with changes in eligible federal funding rates.

According to Bankrate, Top Yield Online Savings Accounts currently pay an average of 4.4%. That’s down from about 5% last year, but the annual inflation rate is well above 2.8%.

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