While investors are optimistic the Federal Reserve will pause interest rates this month, the move is unlikely to bring relief to stretched consumers holding credit card debt and variable rate loans.
Despite the pause, Americans are unlikely to see any relief according to Greg McBride, CFA, chief financial analyst with Bankrate.com.
"A pause won’t 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’s 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’t hike rates further.
"A pause won’t 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’s 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’t hike rates further.
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