As of April 2025, the current interest rate range is between 4.25% and 4.50%. The Fed has indicated that this will remain unchanged for the time being, prefering to stay cautious before implementing any major changes. This decision comes despite projected increases in inflation and the overall cost of living in the U.S., driven by tariffs and cuts to federal spending.

 

Tariffs can drive up costs for both businesses and consumers by making it more expensive to produce goods, which makes everyday products less affordable.

 

Should tariffs further increase these costs or inflation grows as a result, the Fed would likely change their rates to reflect these economic shifts.

 

Recent attempts to cut federal spending could have a similar domino effect, which could slow consumer demand and business activity while also raising unemployment rates.

 

The Federal Reserve meets multiple times throughout the year to discuss potential changes to interest rates, though it is uncertain whether current economic conditions will lead them to raise or lower these rates.

 

Many organizations have started to release projections for potential rate changes in 2025, with the majority arguing that the Fed will end up cutting rates rather than raising them.

 

Goldman Sachs, one of the United States' largest investment banks, predicts that the Fed will lower interest rates three times throughout 2025 to assist borrowers amid ongoing discussions on tariff implementation.

 

Through these cuts, the Fed would create more opportunities for borrowers to refinance existing loans and reduce obstacles that hinder consumer spending, helping to mitigate the negative economic impacts of inflation and reduced spending for both consumers and businesses.

 

As the U.S. economic landscape evolves under new federal policies, the Chandler Chamber will monitor changes to keep our members informed about adjustments to the federal interest rates. •••