Latest News
2026 Honda Ridgeline ReviewThe Fed Lowers Interest Rates
The first Federal Reserve cut of 2025 just happened, but how will it affect the automotive industry and consumer lending?Fed Makes First Cut of the Year
Federal Reserve Chairman Jerome Powell just announced that a cut to the federal funds rate by 25 basis points. With today’s announcement, the rate lowers from a range of between 4.25% and 4.5% to between 4% and 4.25%. This is now the lowest it’s been since 2022. The last time the Fed lowered rates was in 2024.
The quarter-point drop was widely anticipated after months of Powell holding steady. Confidence in real GDP growth this year, and no expected changes in the unemployment rate contributed to the decision.
The Effect on the Auto Industry
Banks could start lowering their interest rates immediately, if they didn’t already in anticipation of the cut. However, the ripple effect on consumer loans like mortgages, credit cards, and auto loans are usually a more gradual process.
Slightly lower auto loan rates should give consumers some modest relief on their monthly payments. However, more relief could be on the way as additional cuts are also expected when the Committee meets again in late October and mid-December.
In the meantime, several automakers are offering a variety of new car incentives like low lease offers, cash back deals, and 0% APR on several 2025 and 2026 models
