How the Fed’s Interest Rate Decision Affects Credit Cards, Loans and More

After the Fed’s quarter-point increase in September, its benchmark rate is now in a range of 3.75 to 4 percent. Many consumer products, like credit cards, personal loans and small business loans, are pegged to the prime rate, which tracks the Fed’s actions, and serves as a base line to set rates.

Other rates don’t move in lock step with the Fed’s actions, but are still influenced by them. Rates on 30-year, fixed-rate mortgages, for example, generally track the yield on 10-year Treasury bonds. As of Thursday, 30-year fixed-rate loans averaged 7.32 percent, according to Freddie Mac, down from 7.40 percent last week but up substantially from 6.19 percent a year ago.

Elevated rates have helped savers, however, who have collected more in interest on high-yield savings accounts and money market funds.

The average interest rate for the 100 biggest money market funds tracked by Crane Data now stands at 3.73 percent, up from 3.51 percent at the end of August.

Article source: https://www.nytimes.com/2026/10/28/business/economy/fed-interest-rates-credit-cards-loans.html