MIAMI–After 11 interest rate increases since early 2022, the Federal Reserve is widely expected to announce a rate cut when it meets next week—but not all Americans agree that’s a good thing.
According to a new Fed Rate Survey conducted by WalletHub, a 25-basis point rate reduction would save consumers roughly $1.87 billion in interest over the next 12 months. Some economists, including in credit unions, say a 50-basis point cut could be on the table.
To gauge public sentiment about Federal Reserve rate cuts, WalletHub said it conducted a nationally representative survey. Here’s what it said it found:
Key Findings
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Rate-Cut Concerns: 63% of Americans are concerned that cutting interest rates will make inflation worse.
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Lingering Inflation: More than nine in 10 people think inflation is still an issue.
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Recession Concerns: Nearly three in four Americans are concerned about a recession.
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More Worries About Inflation: Four in five people are more concerned about inflation than a recession.
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Political Rate Cuts: 76% of Americans think the Fed is planning to cut interest rates for political reasons.
- Skeptical of Shared Savings: Nearly two in five Americans think banks and credit unions will not pass savings from lower rates on to their customers.
Projected Impact of a Fed Rate Cut
In its analysis of what a 25-basis point rate cut would mean, WalletHub said:
- Consumer Savings: Credit card users will save roughly $1.87 billion in interest over the next 12 months. The company says such a cut has a 73% probability.
- Mortgage Savings Boost: The Fed’s Sept. 18 rate cut has already decreased the cost of the average 30-year mortgage by $10,080 over the life of the loan, as mortgages have fixed rates that are priced with a far longer time frame in mind than other borrowing vehicles.
- Auto Loan Rate Drop: WalletHub said it expects the average APR on a 48-month new car loan to drop by around 12 basis points in the months following a 25-basis-point rate cut.
See the full results of WalletHub’s Fed Rate Survey.