INDIANAPOLIS — The Federal Reserve cut its key interest rate by a quarter-point on Wednesday.
Experts say the average consumer may see a slight benefit.
This marks the Federal Reserve’s third cut this year.
“We’re down at about 4.25 percent of an interest rate. Relatively speaking, in the last 10 years or so, we’re still in a bit of an elevated interest rate environment," IU Finance Professor Joe Fitter said.
You may notice changes in the interest you’re paying on consumer debt like credit cards, auto loans, or if you’re looking to apply for a mortgage.
“We may see a slight reduction in the mortgage interest rates," he said.
That’ll be helpful for Columbus native Blake Coats.
The 31-year-old and his wife are looking to purchase a home.
“We started some initial searching for the house in the outer Indianapolis area. Probably more like Fishers, McCordsville," Coats said.
2025 is also looking to be an expensive time for Ryan Paris.
He estimates miscellaneous repairs to his condo will run him between $15,000 and $20,000.
“I was going to finance it [but] the interest rate was pretty high, so I put it off," Paris said. “New furnace and air conditioner. And a couple of windows.”
We may not see as many reductions in 2025.
That means consumers may not enjoy much lower rates next year for mortgages, auto loans, credit cards, and other forms of borrowing.
“The interest rate may continue to fall a little bit over the course of 2025. But we’re not expecting a very significant drop in interest rates over the next year," Fitter said.
Fitter says it’s important to budget.
“Trying to stick to it is really a helpful activity. If you don’t overspend, you won’t have to use those credit cards and risk not being able to pay those cards off at the end of the month," he said.
