What that means for consumer loans

Most credit cards have a short-term rate, so they track the Fed's benchmark.

After the Fed cut rates three times in the second half of 2025, the average annual percentage rate has stayed just under 20%, according to Bankrate.

"Without Fed rate cuts, there's not much reason to expect meaningful declines anytime soon, so carrying a balance will remain very expensive," said Matt Schulz, chief credit analyst at LendingTree. 

Fixed mortgage rates, on the other hand, don't directly track the Fed but typically follow the lead of long-term Treasury rates. 

Concerns about how the Iran war will impact the U.S. economy have already pushed the average rate for a 30-year, fixed-rate mortgage up to 6.38% as of Tuesday, from 5.99% at the end of February, according to Mortgage News Daily.

That leaves homeowners with existing low mortgage rates "feeling stuck," said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. "Mortgages, more than any other credit type, work on a churn," she said, referring to how a dip in rates can boost borrowing activity.

Federal student loan rates are also fixed and based in part on the 10-year Treasury note, so most borrowers are somewhat shielded from Fed moves and recent economic uncertainty.

Current interest rates on undergraduate federal student loans made through June 30 are 6.39%, according to the U.S. Department of Education. Interest rates for the upcoming school year will be based in part on the May auction of the 10-year note.

Auto loan rates are tied to several factors, including the Fed's benchmark. Because financing costs remain elevated, new car buyers are taking on longer loans to keep their monthly payments manageable, according to the latest data from Edmunds.

Even so, with the rate on a five-year new car loan near 7%, the average monthly payment on a new car rose to $773 in the first quarter of 2026, an all-time high.