The Federal Reserve is set to announce its next interest rate decision Wednesday, which could mean more relief for borrowers.
Many economists say the softer inflation report likely opens the door to another quarter percentage point cut. That could help reduce rates for credit cards and loans, such as home equity lines of credit.
But for savers, it means lower returns as banks offering top interest rates tend to pay more when the U.S. central bank hikes rates and less when it cuts them, according to Bankrate.
While mortgage rates aren’t set by the Fed, they’re heavily influenced by its policy moves. Mortgage rates have already dipped ahead of the Fed’s rate decision.
While every reduction helps, Mical Jeanlys-White, founder and CEO of Wealthmore, a Center City-based financial advisory firm, cautions a quarter point decrease won’t dramatically move the needle for most consumers.
“You might have an interest rate that is six and a half [percent], maybe it goes down to six, but you were probably hoping four or three, but that is not likely to happen so it’s still upon the consumer to find ways to save, to find ways to sort of readjust your lifestyle so that you are able to absorb these changes in the economy,” Jeanlys-White said in a recent appearance on the new CBS News Philadelphia In Your Corner podcast. “It’s a little bit of relief, I’m not going to tell you it is sort of a windfall of relief.”
The new CBS News Philadelphia In Your Corner podcast is dedicated to helping you find solutions to better manage your money, spot the latest scams and know your rights as a consumer so you can protect yourself.
Each week will feature a different guest expert. You can find new episodes posted every Wednesday on the CBS Philadelphia YouTube channel.
Looking for help with a consumer issue? Click here to submit your complaint to In Your Corner.
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