Five ways the Fed can impact your finances
“As banks protect the risks seen in an uncertain economy, banks have risen slowly recently, and I think growth is likely to continue until the Fed moves,” said Matt Schulz, chief credit analyst at LendingTree.
“The jump is unwelcome news for cardholders who are already pushed to advantage due to high interest rates and rising prices,” he added.
2. Home loan
Mortgage rates do not track the Fed directly, but are largely linked to the Treasury yields and the economy. As a result, experts say that concerns about tariffs and ongoing uncertainty about future costs have kept these charges within the same narrow range for several months.
According to Mortgage News Daily, the average rate for a 30-year fixed-rate mortgage was 6.81% as of July 28th, while the fixed-rate rate for 2015 was 6.06%.
Adjustable rate mortgages, or weapons, and home equity credit lines, or HELOCs, are fixed at the prime rate and rise.
These high prices, along with much higher home prices, were unfortunate obstacles to becoming a buyer. “We expect the mortgage market to continue to grow modestly until mortgage rates begin to fall meaningfully,” says Michele Raneri, vice president of US research and consulting at Transunion.
3. Car loan
Auto loan fees are linked to several factors, but the Fed is one of the most important.
According to Edmunds, the Fed’s benchmark remains stable, with the average five-year new car loan rate at 7.3%, close to a record high, with the average used car loan rate at 10.9%.
But automobile prices are also rising — in part due to pressure from Trump’s tariffs on imported vehicles and auto parts, increasing monthly payments to car buyers and increasing affordability issues. Currently, new car buyers have the highest share of all-time, including car payments of more than $1,000 per month.
The GMC SUV was parked outside a GMC Buick dealership in Edmonton, Alberta, Canada on March 22, 2025.
Artur widak | nuphoto | Getty Images
“Consumers are extending their budgets to limits, and they are undertaking significantly longer loans and larger monthly payments just to get into a new car. This is all before the tariffs fully appear in vehicle pricing.”
Regardless of the Fed’s stance on interest rates, “it will not immediately change the deeply entrenched and affordable challenges in the market,” he added.
4. Student loan
The federal student loan rate is set once a year, based in part on the Treasury Notes auctions for the past 10 years in May. As they are fixed for the life of the loan, most borrowers are somewhat protected from the Fed’s movements and recent economic uncertainty.
As of July 1st, the interest rate on undergraduate federal student loans for the 2025-26 grades was 6.39%.
While borrowers with existing federal student debt balances will not see changes in their fees, many now face other headwinds with fewer federal loan leniency options and a popular repayment plan that is currently pending.
5. Save money
Conversely, according to Bank Rates, the best online savings accounts still offer above average returns, currently paying more than 4%.
Central banks do not directly affect deposit rates, but yields tend to correlate with changes in eligible federal funding rates. Therefore, not changing that rate is over the savings rate the rate is greater than the inflation rate. This is a huge advantage for savers.
“It’s not a good time to be a borrower, but it’s the best time to be a saver. Please lean towards that,” Bankrate Chief Financial Analyst Greg McBride recently told CNBC.
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