How a Federal Reserve Rate Hike Could Impact Your Auto Loan – And One Factor That Matters More
The Federal Reserve's Federal Open Market Committee is widely expected to announce another 25-basis-point increase in the target federal funds rate on Wednesday. This would bring the benchmark interest rate to a target range of 1.25%-1.50%, up from 1.00-1.25% currently. Since auto loan rates often follow the fed funds rate, here's how the Fed's move could affect you if you're in the market for a new auto loan, and one factor that matters much more.
The short answer is "yes." However, it's not a perfect correlation. In other words, don't expect auto loan rates to increase by the exact amount the Fed raises the federal funds rate target range.
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Source: Fool.com
