Fed Leaves Fed Funds Target Rate Unchanged at 1.50% to 1.75%, Plans to Take 2020 Off
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Fed Leaves Fed Funds Target Rate Unchanged at 1.50% to 1.75%, Plans to Take 2020 Off

The Federal Reserve voted unanimously today to leave the Fed Funds rate unchanged at 1.50% to 1.75%.   This move was widely expected after Chairman Jerome Powell and other Fed governors signaled that they were comfortable with where borrowing costs were after three Fed funds rate cuts this year.

In its statement, the Federal Reserve removed its earlier guidance indicating that it would increase rates once in 2020, and noted that it now does not anticipate needing to raise rates again until 2021.

Thus, loan products that are tied to interest rates, e.g., credit cards, auto loans, personal loans, and home equity lines of credit (HELOC), are now much lower than they were at the beginning of 2019 when the Fed funds rate peaked at 2.25% to 2.50%.   While, those seeking new mortgages and home equity loans could act now to take advantage of lower rates, the Fed also indicated that there is no hurry as current rates will most likely remain unchanged for much or all of next year.

You can check mortgage and home equity loan rates here.

Likewise, savings rates aren’t likely to go up anytime soon, but they also aren’t likely to fall much further either.   Those with excess cash reserves can still take advantage of short-term CD rates that offer a nice, but not necessarily great, premium over savings rates in consideration of their loss of liquidity.

Check local savings and CD rates here.     

 

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to financial literacy and bank transparency. Since co-founding this website in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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