{"id":9056,"date":"2023-08-06T07:20:19","date_gmt":"2023-08-06T07:20:19","guid":{"rendered":"https:\/\/isafespend.com\/credit-cards\/a-fed-pause-likely-wont-help-struggling-consumers\/"},"modified":"2023-08-06T07:20:20","modified_gmt":"2023-08-06T07:20:20","slug":"a-fed-pause-likely-wont-help-struggling-consumers","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=9056","title":{"rendered":"A Fed pause likely won\u2019t help struggling consumers"},"content":{"rendered":"
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The Federal Reserve paused rate hikes on Wednesday\u2019s marking the end to 10 straight increases which have driven borrowing costs above 5% squeezing consumers and creating headwinds for the economy. Policymakers also said there may be two more hikes this year.\u00a0<\/p>\n

Despite the pause, Americans are unlikely to see any relief according to Greg McBride, CFA, chief financial analyst with Bankrate.com.<\/p>\n

“A pause won\u2019t bring borrowing rates lower, particularly for variable rate debt such as credit cards and home equity lines of credit that have increased in step with the Fed\u2019s 10 previous interest rate hikes,” McBride said. “Elevated inflation and a strong labor market mean the Fed is nowhere close to cutting interest rates, so borrowers will continue to be dealing with high interest rates for months to come, even if the Fed doesn\u2019t hike rates further.”<\/p>\n

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“A pause won\u2019t bring borrowing rates lower, particularly for variable rate debt such as credit cards and home equity lines of credit that have increased in step with the Fed\u2019s 10 previous interest rate hikes, elevated inflation and a strong labor market mean the Fed is nowhere close to cutting interest rates, so borrowers will continue to be dealing with high interest rates for months to come, even if the Fed doesn\u2019t hike rates further.”<\/p>\n

– Greg McBride, CFA, chief financial analyst with Bankrate.com.com<\/cite><\/span><\/p><\/blockquote>\n

INFLATION COOLS SHARPLY IN MAY<\/strong><\/p>\n\n\n\n\n\n\n\n<\/tr>\n<\/tbody>\n<\/table>\n

Rates for auto loans, credit cards and mortgages have all trended higher in recent months leaving consumers with less cash.\u00a0<\/p>\n

“Home equity rates are the highest in more than 20 years, credit card rates are the highest on record, auto loan rates are the highest since 2010, and mortgage rates are again flirting with 7%, a relic of two decades ago.” McBride also says paying down high cost, variable rate debt is an urgent priority for households.<\/p>\n

RATE SQUEEZE<\/strong><\/h3>\n

Mortgage Rates 6.71%<\/strong><\/p>\n

Credit Card APR \u00a023.98%<\/strong><\/p>\n

New Car Loan 6.58%<\/strong><\/p>\n

Used Car Loan 11.17% \u00a0<\/strong><\/p>\n

Source: Freddie Mac, Lending Tree, MarketWatch Guide\u00a0<\/i><\/p>\n

Consumers are seeing some relief. Inflation, which had spiked to 9.1%, fell down to 4% in the Consumer Price Index’s May report, on an annual basis.\u00a0<\/p>\n

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94% of market participants expect the Fed to pause, as tracked by the CME\u2019s- FedWatch Tool, when policymakers will announce their decision at 2pm on Wednesday. Chairman Jay Powell\u2019s press conference will follow where investors will listen for any clue about whether the likely pause is a one-off or a holding pattern.\u00a0<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Federal Reserve paused rate hikes on Wednesday\u2019s marking the end to 10 straight increases which have driven borrowing costs above 5% squeezing consumers and creating headwinds for the economy. Policymakers also said there may be two more hikes this year.\u00a0 Despite the pause, Americans are unlikely to see any relief according to Greg McBride,<\/p>\n","protected":false},"author":1,"featured_media":9057,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48],"tags":[],"class_list":{"0":"post-9056","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-credit-cards"},"yoast_head":"\nA Fed pause likely won\u2019t help struggling consumers | iSafeSpend<\/title>\n<meta name=\"description\" content=\"The Federal Reserve paused rate hikes on Wednesday\u2019s marking the end to 10 straight increases which have driven borrowing costs above 5% squeezing\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/isafespend.com\/?p=9056\" \/>\n<meta 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Ticker<\/th>\nSecurity<\/th>\nLast<\/th>\nChange<\/th>\nChange %<\/th>\n<\/tr>\n<\/thead>\n
V<\/td>\nVISA INC.<\/td>\n238.99<\/td>\n+0.23<\/td>\n+0.10%<\/td>\n<\/tr>\n
MA<\/td>\nMASTERCARD INC.<\/td>\n391.35<\/td>\n-1.66<\/td>\n-0.42%<\/td>\n<\/tr>\n
DFS<\/td>\nDISCOVER FINANCIAL SERVICES<\/td>\n102.36<\/td>\n-0.23<\/td>\n-0.22%<\/td>\n<\/tr>\n