Most Americans Believe FED Rate Cut Was Politically Motivated

If you think Federal rate cuts are motivated by politics, then you fall into the great majority of those recently surveyed by personal finance website WalletHub.com.

WalletHub’s November 2024 FED Rate Report shows 74% of Americans think the FED cutting interest rates is politically motivated.

The survey also indicates that 60% say that interest rates will affect their vote, 54% say the rate cut in September saved them money, more than 9-in-10 think inflation is still an issue, more than 3-in-4 are more concerned about inflation than a recession, 68% think cutting interest rates will make inflation worse and more than 3-in-5 think the economy is improving.

According to WalletHub, the FEDERAL rate cut is expected to positively affect credit card users, mortgage rates and auto loans.

Full Report:

Fed Rate Survey Key Findings

• Political Motives: 74% of Americans think the Fed is cutting interest rates for political reasons.

• Rates Influencing Voters: 60% of Americans say that interest rates will affect how they vote in the presidential election.

• Rate Cut Savings: 54% of Americans say the Fed’s September rate cut saved them money.

• Problematic Inflation: More than 9 in 10 people think inflation is still an issue.

• More Concern About Inflation: Nearly 3 in 4 people are more concerned about inflation than a recession.

• Rate Cut Fears: 68% of Americans are concerned that cutting interest rates will make inflation worse.

• Economic Optimism: More than 3 in 5 people think the economy is improving rather than getting worse.

Projected Impact of a Fed Rate Cut

• Consumer Savings: Credit card users will save roughly $1.87 billion in interest over the next 12 months if the Fed cuts its target rate by 25 basis points on November 7 (95% probability).

• Mortgage Savings Boost: The Fed’s November 7 rate cut has already decreased the cost of the average 30-year mortgage by $10,440 over the life of the loan, as mortgages have fixed rates that are priced with a far longer time frame in mind than other borrowing vehicles.

• Auto Loan Rate Drop: WalletHub expects the average APR on a 48-month new car loan to drop by around 12 basis points in the months following a 25-basis-point rate cut.