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When it comes to what Americans can afford, no institution gets bigger than that The Federal Reserve.
That’s especially true as the Fed on Wednesday wraps up its two-day Federal Open Market Committee meeting, a closed-door session in which policymakers decide whether interest rates will stay high or start easing.
The Fed is widely expected to keep its key interest rate unchanged at 3.50% to 3.75%, marking the second straight stop after a series of cuts starting in September 2024. For households, that means monthly payments on big-ticket purchases are likely to remain high for now.
TRUMP PROMISES COSTS DOWN; THE CONFLICT WITH IRAN IS NOW DETERMINING THAT PROMISE
The Federal Open Market Committee meeting is a closed session where policymakers decide whether interest rates will remain high or begin to ease. (Michael Nagle/Bloomberg via Getty Images)
The reluctance to cut reflects the Fed’s view that inflation is still running somewhat above its target, while broader economic and geopolitical uncertainty strengthens the case for caution.
The chairman of the Federal Reserve Jerome Powell will share more details about the decision on Wednesday afternoon.
The country’s central bank does not set the price of groceries, cars or houses directly. But it does affect how much it costs to borrow money, and that can make a big difference in what families pay each month.
Right now, borrowing is expensive. At the top interest rates it means larger monthly payments on mortgages, car loans and credit cards, even if the price of the house or car has not changed.
For many Americans, that’s why life can still seem out of reach now that inflation has cooled. Prices may not rise as quickly, but the cost of financing large purchases remains high.
Trump VS The Federal Reserve
Federal Reserve Chairman Jerome Powell is expected to announce in detail that the central bank will hold rates this week. (Roberto Schmidt/AFP/Getty Images)
That difficulty is particularly evident in the housing and automobile markets, two of the biggest expenses for many households. A house or car may cost about the same as it did last year, but the mortgage attached to it could add hundreds of dollars to the monthly payment. Buyers tend to pay more not because the property itself is more expensive, but because the cost of borrowing has paid off.
That background has become a political case for the President Donald Trumpwho campaigned to restore affordability and ease the financial burden at home but now faces growing voter skepticism about whether that relief will happen before the midterm election cycle.
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President Donald Trump speaks about military strikes against Iran on March 9, 2026, at Trump National Doral Miami. (Mark Schifelbein/AP Photo)
Trump has repeatedly pushed for lower interest rates and accused Powell of not cutting them aggressively, as he continues to emphasize a strong economy. In general, rate cuts are used to support a slow economy, not an efficient one.
And if Trump was already eager for Fed rate cuts, the conflict with Iran is likely to complicate the picture. Rising oil prices have renewed inflation concerns, which could give Fed officials another reason to remain cautious.
If i The war in Iran tensions and energy costs remain high, will cloud not only this week’s decision but also the prospect of future cuts – extending high borrowing costs that have kept pressure on household budgets.
