In spite of constant, threatening pressure from President Donald Trump to lower interest rates, the Federal Reserve is likely to hold interest rates steady at this week’s policy meeting, as reported by CNBC.
Trump has continually insisted that the Fed cut borrowing costs amid the broader economic uncertainty of a weak employment market and inflation pressure. However, the Fed is expected to hold its current course of a 3.50% to 3.75% range and expressed commitment to balancing inflation risks with labor market stability, rather than lowering interest in the hope of spurring economic growth.
How a Stalwart Fed Will Impact Your Loans
Assuming the Fed does not lower interest rates, the most immediate and obvious impact upon your loans will be unchanged debt payments on your part. While interest rates on a number of loans are currently at their lowest rate in years, almost anyone with a monthly loan payment would enjoy even lower rates. Instead, expect your debt payments to remain mostly the same.
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Unchanged interest rates may also make it more difficult to refinance your mortgage, or even harder to take out a new loan. The best way to combat this? Sharp borrowers should focus upon improving their credit scores, and shopping multiple lenders to find the best terms available.
Additionally, Business Recorder has reported that economists are cautioning that while inflation has cooled from recent COVID-era highs, it still remains above the Fed’s 2% target, which gives the policymakers very little room to aggressively cut rates. That indicates stable — but not lower — loan costs for Americans in the near future.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: The Fed Is Likely To Keep Interest Rates Steady Despite Trump Pressure — What This Means for Your Loans
