As a result of the Fed's latest decision, the federal funds rate will remain at 6.5 percent and the federal discount rate will stay at 6 percent. Those two rates help guide interest rates on consumer loans and savings products. That's in part because the latest meeting came at a tough time for the Fed. Sales of cars and homes have been dropping because of declining consumer confidence and falling stock prices. But low unemployment and persistently high crude oil, heating oil and gasoline prices could still cause inflation to pick up.
Most experts say the former concerns trump the latter.
They say the next interest rate move will be a reduction. But they can't seem to agree on the timing. That leaves consumers wondering whether to expect rate relief by Valentine's Day, Easter, the Fourth of July or even next fall. Yet the interest rate outlook is improving. The mere expectation that rates will eventually come down is already causing market-sensitive rates to decline and that trend should continue.