As the Fed continues to battle a never-ending rise in consumer inflation, many are predicting that there is still potential the Fed would choose to continue to raise interest rates. After last month's announcement, Fed Chair Jerome Powell stated "inflation is still too high." This made it obvious to economists that another rise in interest rates could still be a possibility as the Fed continues to try and combat soaring inflation rates.
Currently, according to CNBC, because many credit cards have a direct connection to the Fed's Benchmark Rate, average credit card rates have spiked more than 20% setting a new all-time measure.
Matt Schulz the chief credit analyst at LendingTree reflected on the situation expressing "Credit card rates are the highest they have been in decades and will continue to get higher in the next few months."
Average Credit Card Rate: October 2023 is 24.46% versus September at 24.45%
I would expect borrowing costs to remain at their highest levels with many economists arguing that the rates will stay this way for a while in order to balance out. The Fed's tactics will continue to influence and affect borrowing and saving rates on a day-to-day basis.
Source for Statistics: https://www.lendingtree.com/credit-cards/average-credit-card-interest-rate-in-america/
Article Source: https://www.cnbc.com/2023/10/27/federal-reserve-may-not-hike-interest-rates-what-that-means-for-you.html
I think that battling the issue of the cost of borrowing is an issue that is bigger than many people realize. With high cost in many factors of everyday life, more and more people are turning to credit to pay multiple different types of payment. People are starting to spend money they don't have.
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