Last month, Federal Reserve officials decided not to raise interest rates in their committee meeting. Don’t fall asleep yet. Details were just released today, and it turns out the majority of the committee agreed to keep rates steady the rest of the year. That’s a big deal. First, because the Fed originally said it expected two rate hikes in 2019, and now we’re going to see zero. Second, because this news is making President Trump a happy man. He’s repeatedly called on Fed Chair Jerome Powell to stop raising rates and blames last year’s increases for a bumpy stock market and slower economic growth. Here’s what the news means for your wallet:
If you have credit card debt, steady federal interest rates = big win. When those rates go up, credit card companies usually raise their own rates. Which makes it more expensive to have a balance.
If you’re a saver, this is a bummer. When the Fed raises rates, banks eventually get around to paying you more to keep money in your savings accounts. These rates probably aren’t going up anytime soon.
If you’re house hunting, spring for the mansion. Kidding. Stick with your budget and enjoy the potential savings. While the Fed’s benchmark interest rate isn’t directly tied to fixed mortgage rates, it can influence them. So if you were already planning on it, buying before rates go up may save you money in the long run.
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