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The Federal Reserve influences consumer loan rates by setting the federal funds rate, which affects how much banks charge each other for overnight lending. That cost typically gets passed on to borrowers through higher or lower rates on personal, auto, and student loans.
By tracking the Fed's moves, you can get a better sense of whether taking out a loan will be more expensive or more affordable. It may even help you time your borrowing decisions so you can secure the best possible rate.
The Fed recently raised its rate by 25 basis points during its September 2026 meeting. See what impact that could have on your borrowing costs.
The Federal Reserve sets a target range for the federal funds rate, a benchmark rate that determines how much lenders charge one another for overnight lending. When the Fed increases this rate, lenders generally pass along the higher costs to consumers by raising interest rates on consumer loans and credit cards. When the Fed decreases this rate, lenders may lower the interest rates on their loans as well.

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