How December’s Fed rate cut affects borrowing costs

The Federal Reserve is expected to lower its benchmark interest rate by a quarter-point on Wednesday, its third cut this year.
“Another Fed rate cut to close an unnervingly uncertain year is good news for borrowers,” said Matt Schulz, chief consumer finance analyst at LendingTree. “The accumulated savings from the Fed’s moves are starting to add up to real money.”
Conversely, lower rates also means savers will likely begin to see lower yields on their online savings accounts and certificates of deposit. And people carrying sizable credit card and many other debts still probably won’t feel meaningful relief.
Here is where various interest rates stand now.
Auto Rates
What’s happening now: Auto rates have been largely stable but remain elevated, while new car prices are slowly beginning to rise. But tariffs are soon expected to push them up more sharply.
Car loans tend to track with the yield on the five-year Treasury note, which is influenced by the Fed’s key rate. But other factors determine how much borrowers actually pay, including credit history, the type of vehicle, the loan term and the down payment. Lenders also consider the levels of borrowers becoming delinquent on auto loans. As those move higher, so do rates, which makes qualifying for a loan more difficult, particularly for people with lower credit scores.
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