After a year of sitting on the sidelines, the Federal Reserve finally cut short-term interest rates by a quarter-point. It’s perhaps the most boring financial news out there, given that many market watchers expected just what the Fed delivered.
And now the natural question is: What’s next?
One rate cut won’t solve anyone’s financial woes. The expectation, though, is that economic conditions could give the Federal Reserve more room to cut rates possibly two more times from here this year.
On Sept.17, the Fed cut short-term rates to a target range of at 4% to 4.25%. We learned that the Fed board’s decision wasn’t unanimous.
“Uncertainty about the economic outlook remains elevated,” according to the Fed’s statement, and also noted that “downside risks to employment have risen.”
If the rate cut is rather dull, the political dance at the Fed certainly wouldn’t nab anything lower than a 9 on Dancing with the Stars.
The riveting tango at the Fed created by President Donald Trump‘s push to dominate the central bank continues to provide its own quirky twists and turns.
The September meeting’s highlights include the addition of new Fed governor Stephen Miran, a White House adviser who was nominated by Trump, confirmed by the Senate and sworn in Sept. 16 before the meeting began.
Not surprisingly, Miran wanted a more aggressive rate cut and was the lone vote against the Fed’s action. Miran, according to the Fed’s statement, preferred to lower the target range for the federal funds rate by half a percentage point at the September meeting.
The embattled Federal Reserve governor Lisa Cook, who has filed a lawsuit against Trump for attempting to fire her, was able to take part in the September meeting.
Late Sept. 15, a federal appeals court issued an emergency ruling that allowed Cook to remain for now as she fights Trump’s unprecedented action for firing a Fed governor. Cook, the first Black woman to serve on the Fed board, was appointed to a 14-year term but Trump maintains he has the right to fire her over allegations of mortgage fraud.
And the headline bombshells continue in the who-did-what-when mortgage dustups. On Wednesday, Sept. 17, before the Fed rate decision was announced, Bloomberg reported a situation that suggests a double standard in the Trump administration.
The allegations against Cook involve her reportedly claiming a “primary residence” on different mortgage documents for a home in Ann Arbor and a condo in Atlanta. The mortgage documents were taken out at two different credit unions within weeks of each other in 2021. Trump called her actions “deceitful and potentially criminal conduct.”
According to the Sept. 17 Bloomberg report, U.S. Treasury Secretary Scott Bessent once made similar claims that two of his homes were his “principal residence” on mortgage documents in 2007.
Bessent — who media reports say threatened to punch Bill Pulte, director of the Federal Housing Finance Agency, in the face at a private dinner in early September — took out mortgages on a Georgian manor in Bedford Hills, New York, that would be his “principal residence” over the next year. According to Bloomberg, on the same day, Bessent made the same residency pledge about a beachfront house in Provincetown, Massachusetts.
“But there’s no sign of any wrongdoing on his part, mortgage experts say. Rather, his case demonstrates that an incongruity in home-loan filings isn’t necessarily proof of fraud,” according to Bloomberg.
Bessent’s lender, according to Bloomberg, appears to have not expected him to occupy both homes as primary residences. “Cook’s situation appears similar,” Bloomberg stated.
Reuters reported earlier that Cook declared her Atlanta property as a “vacation home” on some forms.
Bloomberg notes that Bessent’s mortgages were signed by his lawyer, while Cook signed her own documents. Bessent was a hedge fund manager at the time; Cook was a Michigan State University professor of economics and international relations when she applied for her two mortgages.
Financial news and updates: The Fed cut interest rates. How quickly will you notice changes?
The bigger picture here: Any growing power by the White House over the independent central bank ultimately could rattle markets. Thus far, Wall Street is taking much in stride.
The Dow Jones Industrial Average was trading at 46,142.11 shortly before 2:30 p.m. after the Fed’s no-news decision. The Dow had gained 384.21 points or 0.84% in trading.
Trump would have liked a half-point cut on Sept. 17; he got a quarter point. But more rate cuts could be ahead.
The Fed could initiate a quarter-point cut at its next meeting Oct. 28 and Oct. 29 and another quarter-point cut at its last meeting this year on Dec. 9 and Dec. 10, according to Ted Rossman, senior industry analyst for Bankrate.com.
In 2026, he said, “rates could drift downward further, or the Fed might pause.”
Bill Adams, chief economist at Comerica Bank in Dallas, said Comerica is tentatively forecasting for the Fed to hold rates steady in October and make another quarter percentage point cut in December.
“But if the Fed surprises, it will be by cutting more aggressively,” he said.
More aggressive action, Adams said, could end up mirroring the rate cuts that the Fed initiated at its last three meetings in 2024, when the Fed ultimately reduced rates by a full percentage point.
“The Fed is pulled in opposite directions by rising inflation on the one hand and weak hiring on the other,” Adams said.
Hiring is likely to pick up for a variety of reasons, he said, including that provisions in One Big Beautiful Bill Act that will drive up spending on defense and immigration enforcement.
Tax cuts in the bill will help many people when they file their tax returns next year — including retirees and many affluent households who pay high state and local taxes — giving both consumer spending and possibly hiring a shot in the arm.
On the inflation front, Adams said higher tariffs put pressure on profit margins and can lead to price hikes on many goods. The risk that inflation hangs around is elevated since inflation expectations could be up, Adams said.
“The Fed understands that fiscal policy will be more supportive of economic growth in 2026 and will incorporate that into their outlook for job growth and inflation,” Adams said.
The Fed’s rate cut is welcome news for many borrowers. But it’s important to realize that the impact will be modest initially when it comes to what this all means for your money.
Credit card rates are directly influenced by any moves that the Federal Reserve makes when it comes to cutting or raising the federal funds rate.
Right now, the average credit card rate is 20.12%, down from 20.79% in August 2024, according to Bankrate.com.
All things being equal, a quarter-point cut only brings that average rate down to 19.87%.
Some people making minimum monthly payments, Rossman said, might only save $1 a month in interest now if they’re carrying a balance of nearly $6,500.
More rate cuts — if the Fed continues to move in that direction — would mean more savings in the months ahead.
The best way to save money is to pay down as much credit card debt as possible. Try to maintain a high credit score by paying down debt, make payments on time and do not load up debt anywhere close to the maximum available line of credit. One guideline: Keep outstanding debt on each of your credit cards below 30% of the available line of credit.
Anyone having trouble selling a home right now might hope that the Fed’s latest action will send the 30-year mortgage rate tumbling.
But mortgage rates aren’t pegged directly to the short-term federal funds rate, which the Federal Reserve sets at its policy meetings.
The trend for mortgage rates will depend on activity in the 10-year U.S. Treasury market, which serves as the benchmark for mortgages and other long term rates.
The average 30-year fixed-rate mortgage soared in the 7% range through much of January and even had been as high as 6.89% in late May, according to data from Freddie Mac’s primary mortgage market survey.
Rates have fallen already. The 30-year fixed mortgage interest rate averaged 6.35% as of Sept. 11, down from 6.5% the prior week but still up from 6.2% a year ago.
Rossman maintains the average 30-year fixed mortgage rate could fall below 6% by early next year — the first time we’ve seen that level since summer 2022. But much will depend on the outlook for inflation.
“The wind is blowing in the direction of lower interest rates, particularly the short-term rate set by the Fed,” Rossman said, “but there’s still a lot of uncertainty regarding long-term rates.”
Lenders reported that would-be homebuyers hesitated more this spring in light of higher rates, economic uncertainty and tariffs. But some relief might be in sight.
Pontiac-based United Wholesale Mortgage has seen a significant increase in loan volume across the board, particularly with 30-year fixed mortgages, as rates have fallen, according to Alex Elezaj, UWM’s chief strategy officer, said in a statement.
“We expect this momentum will continue to build,” Elezaj said in a statement.
Interest rates on savings could go down a tad from here. Right now, the average rate on a one-year certificate of deposit is 2% — or nearly where it was at a year ago when the average was 2.06%, according to data from Bankrate.com.
Special rate deals will be offered by banks that want to get more of your business. Shop around for higher rates. The highest two-year CD yield is 4.10% in mid-September, roughly double the national average, Rossman said.
CD rates could fall further, especially if the Fed continues on a rate-cutting path.
“Fed rate cuts are great for people with debt, but they stink for savers,” said Matt Schulz, LendingTree’s chief consumer finance analyst.
Savers can lock in some higher rates by opting for a longer-term CD, such as a five-year CD. But Schulz warns that savers should take into account when they’ll need the money in that CD because the early withdrawal penalties for CDs can be substantial.
Oddly enough, auto loan rates could be trending somewhat up, not down, initially.
Jonathan Smoke, chief economist for Cox Automotive, told the Detroit Free Press — part of the USA TODAY Network — on Sept. 17 that given the strong sales in July and August, the car and truck supply has tightened.
“As a result of tighter supply, incentives have declined,” Smoke said, “including fewer low or zero rate offers.”
“And that is a factor we are seeing driving average new loan rates up in September even as longer bond yields have declined with expectations of a Fed rate cut,” Smoke said.
Softer car sales tend to encourage automakers to offer lower promotional rates on some makes and models to move cars and trucks off the lot. But stronger sales tend to put a lid on attractive promotional rates.
And a consumer’s credit score matters a great deal right now, as lenders grow more concerned about economic uncertainty ahead and a borrower’s financial ability to repay that loan.
“For a car buyer, a good credit score matters far more than any Fed decision,” Smoke wrote in late July. He indicated that 0% financing rates started returning earlier this summer, but typically only buyers with stellar credit qualified.
July saw a higher share of new loans with 0% interest rates than any month over the last three years, Smoke said. The shift followed very low levels of 0% offers in the spring, when the tariff-induced buying frenzy drained the supply of new cars and trucks.
Nearly 7% of consumers financing new vehicle purchases at dealers in July locked in a 0% annual percentage rate, according to Cox Automotive.
The average new auto loan rate was 9.03% in July, which was down 31 basis points from June and lower year over year by 65 basis points, according to Cox Automotive. 
Some lenders, though, are offering better car loan rates than they did a year ago.
Now, the average five-year rate for a new car or truck is 7.19% — that’s down from 7.71% a year ago, according to Bankrate.com research. Bankrate’s data is based on a survey of banks in large markets around the country, based on what is being offered directly to consumers with at least a 700 credit score. The data doesn’t include dealer or manufacturer financing.
The auto loan rate that you end up with could be much higher or much lower than that average.
Variables that influence what rate the consumer obtains include the lender, how much you need to finance, the length of the loan and overall economic conditions. Consumers should review their credit score first, and shop for a car loan, before heading to a dealership.
“Many consumers are on the sidelines waiting for a green light,” said Jessica Caldwell, associate vice president and head of insights at Edmunds, in a statement.
“Signals like rate cuts or low-APR promotions can be the spark.”
She noted that interest rates for both new and used vehicles remain above historic norms. A small rate cut won’t dramatically slash monthly payments. “But it does boost overall buyer sentiment,” Caldwell said.
In general, Caldwell said window stickers have not been hit yet with a significant increase in new vehicle prices due to tariffs. But the possibility still looms and creates concern for shoppers who already cannot afford high prices on many cars and trucks.
While some year-end deals and promotional rates will give shoppers a psychological boost, it remains essential to read the fine print. Many offers might be on four-year or five-year car loans when some consumers want six- or seven-year loans to reduce monthly payments.
Caldwell told the Detroit Free Press that it’s hard to predict next year’s interest rates for new vehicle loans.
“Even if the Fed continues to lower rates, the biggest factor is automaker-subsidized loans — and given the current tariff situation, those subsidies seem unlikely, even with lower borrowing costs,” Caldwell said.
Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.

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