Here's what it means for your money if Trump gets his way on interest rates
div > div.group > p:first-child"> The Fed has already hiked its benchmark rate nine times since December 2015. In March, it indicated that it is likely done with increases for the rest of 2019 despite previously forecasting two more at the end of last year. The Fed currently targets the federal funds rate to a range between 2.25% and 2.5% .
Now, in his latest attack, Trump raised the stakes by calling for the central bank to cut interest rates by 1 percentage point. The most recent Fed statement noted that household spending slowed and inflation is running below 2%."Those aren't conditions under which the Fed feels compelled to change interest rates in either direction," McBride added.Most credit cards have a variable rate, which means there's a direct connection to the Fed's benchmark rate.
As it stands, the national average annual percentage rate hit 17.73% this month, while the median was 21.36%, according to CreditCards.com. For those planning on purchasing a new car in the next few months, any rate move – up or down – likely will not have any material effect on what vehicle you drive off the lot.
Because banks' terms allow them to be slower to raise rates on savings products than they are on loans and credit cards, even with a Fed rate increase, banks do not pass on much of that increase to their customers.
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