While the federal funds rate is designed to set what banks charge each other, it trickles down to everything from mortgages to student loans. If you’re planning on applying for a credit card, a home, or a car loan any time soon, here’s how the Fed's waiting game will impact you.
While no rate movement in either direction is the most likely outcome for the time being, there's a chance that if inflation worsens again, the Fed's next move would be not a rate cute, but a rate hike.
Trump's tariff plans could raise prices even more
The biggest contributor to said economic uncertainty is President Trump's stated plans for tariffs on imports. While earlier announced tariffs on Canada and Mexico are on hold (at least for now), China is facing new 10% tariffs, and additional tariffs on those and other countries aren't out of the realm of possibility.
Large purchases like automobiles, appliances, and electronics are likely to see some of the most noticeable price increases, according to Johnston. These items often rely heavily on global supply chains and imported components. Even products assembled in the United States frequently depend on imported parts, meaning tariffs could affect prices even for "American-made" goods.
The bottom line
But hey, while higher interest rates raise costs for borrowers, they can also mean higher yields for savers—so here's how you can take advantage of that.
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