With interest rates holding steady for the fifth time, Jill Schlesinger explains how it affects credit cards, car loans, mortgages and savings.

Washington

The Federal Reserve has maintained its current interest rate range for the fifth consecutive decision, impacting a wide range of financial products. Borrowers, including those with credit card debt, car loans, or personal loans, continue to face high interest rates, with credit card rates averaging over 21 percent and auto loans around 7.5 to 8 percent. Mortgage rates remain elevated, though they are not directly set by the Fed.

On the other hand, savers benefit from higher yields on savings accounts, certificates of deposit, and money market accounts, with rates between 3.5 and 4.5 percent. Despite some positive economic growth, inflation remains a concern, and overall prices are still high for consumers. The Fed's decision is driven by caution over inflation, with many households still feeling the effects of increased costs over recent years.

What the Fed's rate pause means for your money

In today's Money Watch, if you feel like you've been hearing a lot about interest rates lately, it's not in your head. The Federal Reserve yesterday said it would hold rates steady in the current range for the fifth straight time. The decision impacts everything, from credit cards to car loans to savings rates. So what does it all mean for you? CBS News Business Analyst Jill Schlesinger is here to break it all down. Hey, Jill. Good morning. Good morning. All right. What does this mean for borrowers, for savers? Let's talk with borrowers, because borrowers have been under a lot of pressure since interest rates started to rise. And when I say borrowers, I mean anyone who's carrying a credit card balance or anyone who's going to get a new car loan or someone who's getting a personal loan. Can we just take a look at these rates? Credit card interest rates are averaging more than 21 percent. Averaging, that means many people are playing close to 30 percent. Auto loans, seven and a half, eight percent. And by the way, those terms are really long. They're five, six, seven year loans now. Mortgage interest rates, which the Fed does not directly impact, but it's sort of like on a general same cycle as shorter term rates, six and three quarters percent. So it is tough to be a borrower right now. Conversely, high interest rates are great for savers. You can go online right now. You can get a savings rate for a high yield savings account, a short term CD, a money market, three and a half to four and a half percent. Pretty good. Juicy, right? That's even better than, I mean, if you're trying to stay ahead of the S&P 500, three and a half, four and a half percent. But those high interest rates are definitely hurting a lot of consumers who are just struggling to keep up. So I feel that pain. I understand. I hear from these people all the time. They're like, why isn't the Fed lowering rates? And the real reason is that Powell and the rest of the Federal Reserve, they are worried about resurgent inflation. That's really their big fear. Tariffs can often have a lag of six to 12 months. And they're kind of waiting to see whether we see the inflation rate move up. And yet prices for a lot of consumers still remain high. And yet we got some good GDP numbers this week. Why aren't people seeing some of the benefits of that? OK, so can I just like reframe the GDP? Let's forget about the first quarter versus the second quarter. Let's look at the first half of the year. The economy is growing at a more slowing pace that we can see. So in the first quarter, we had a drop. Then the second quarter, it's resurgent. Let's look at it all together. The economy is growing at about 1.2 or 1.3 percent annualized. That's half of what we saw last year. So we are seeing a slowdown in the economy. But because prices went up so much over the last three years, even if the inflation rate is slowing down, prices are still high, right? If you go up, up, up, up, up, and now it's not going up by as much. But prices are still at a very tough level for people. People complain about the catch-up effect. Federal Reserve Chair Powell talked about this yesterday, like the catch-up effect is that when something comes up for renewal and you are not used to paying that price, like your renter's insurance or your car insurance, you're like, whoa, I have sticker shock. And so we are seeing still price pressures build up. There is a lot of sticker shock these days, Jill. Thank you so much. If you have a money-related question for Jill, just send her an email at askjillatcbs.com, and she could answer it in an upcoming segment.

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Breakdown