On the heels of a stronger-than-expected jobs report and elevated inflation readings, the Federal Reserve is expected to hold interest rates steady at the end of its two-day meeting this week — despite pressure from President Donald Trump.

“Consumers have been waiting for years to see pricing come down. NO INFLATION, THE FED SHOULD LOWER ITS RATE!!!” Trump said in a Truth Social post Friday.

As an independent agency, the central bank has always operated autonomously from the White House. Federal Reserve Chair Jerome Powell has repeatedly said that monetary policy decisions are completely separate from politics. At the same time, the president’s new trade policies are a barrier to cutting rates, in part because economists expect the new tariffs could lead to a widespread rise in prices that complicate inflation forecasts.

To be sure, many Americans are getting squeezed by high prices and high borrowing costs, while the potential inflation impacts from a costly trade war weigh heavily on household budgets.

“Consumers are always the ones who pay the price,” said Eugenio Aleman, chief economist at Raymond James.

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The federal funds rate sets what banks charge each other for overnight lending, but also affects many of the borrowing and savings rates consumers see every day.

“Uncertainty rules amid a trade war and the ever-changing landscape of tariffs,” said Greg McBride, Bankrate’s chief financial analyst. “But with the hard data on consumer spending and employment still hanging in there, the Fed will remain firmly planted on the sidelines.”

Markets now widely expect the Fed to wait to cut rates until July, with two or three more reductions to follow by the end of the year.

Once the federal funds rate comes down, borrowing costs could decrease across a variety of consumer debt, such as auto loans, credit cards and mortgage rates, making it easier to access cheaper money. 

Here’s a breakdown of how it works.

Most credit cards have a variable rate, so there’s a direct connection to the Fed’s benchmark.

For the most part, the average annual percentage rate has hovered just over 20% this year, according to Bankrate, not far from last year’s all-time high. 

The Fed holding steady isn’t the only thing keeping credit card rates high. “Banks are nervous about all of the uncertainty in the economy and what it means for consumers,” said Matt Schulz, chief credit analyst at LendingTree.

“When that happens, banks try to minimize risk as much as possible, and one of the ways they do that is to raise interest rates on credit cards,” he said.

Credit card debt continues to be a pain point for consumers struggling to keep up with high prices. Total credit card debt and average balances are also at record highs.

Although 15- and 30-year mortgage rates are largely tied to Treasury yields and the economy, concerns about the direction of the economic policy and Trump’s tariff plans have been a drag on rates, according to the Mortgage Bankers Association.

The average rate for a 30-year, fixed-rate mortgage is now 6.81%, down from 7.04% at the beginning of the year, according to Bankrate. But for potential home buyers, that’s not enough of a decline to give the housing market a boost.

“Unfortunately for those shopping for a home this summer, rates are likely to stay in or around that range in the near future,” Schulz said.

Although auto loan rates have seen little change, car payments have gone up because prices are rising, while Trump’s 25% tariffs of imported vehicles adds more pressure.

Currently, the average rate on a five-year new car loan is 7.33%, down from 7.53% in January, according to Bankrate.

Federal student loan rates are fixed for the life of the loan, so most borrowers are somewhat shielded from Fed moves and recent economic turmoil.

Interest rates for the upcoming school year will be based in part on the May auction of the 10-year Treasury note and aren’t likely to change much. Undergraduate students who took out direct federal student loans for the 2024-25 academic year are paying 6.53%, up from 5.50% in 2023-24.

Although borrowers with existing federal student debt balances won’t see their rates change, many are now facing other headwinds and fewer federal loan forgiveness options.

On the upside, top-yielding online savings accounts still offer above-average returns and currently pay as much as 4.5%, according to Bankrate. While the central bank has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate — so holding that rate unchanged has kept savings rates elevated, for now.

“For consumers, oftentimes the best way to protect your finances in times of uncertainty is to double-down on boosting emergency savings and eliminating high interest rate debt,” said Bankrate’s McBride. “This builds a buffer in the event of an income disruption or unanticipated expenses and insulates you from costly borrowing.”

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For many Americans, a Social Security number is the first form of identification they receive, mailed as a paper card a few weeks after birth.

Now, the Social Security Administration is looking to give that form of ID an update by enabling secure digital access to Social Security numbers that will provide an alternative to the traditional Social Security card. Experts are cautiously optimistic about the idea, but have some security concerns.

The new digital feature will allow individuals who have either forgotten their Social Security number or who have lost their Social Security cards to access their personal number online through the agency’s My Social Security website. They will also be able to access their Social Security numbers through digital devices and display them as identification for “reasons other than handling Social Security matters,” according to the agency.

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With the new effort, the Social Security Administration aims to reduce the inconveniences caused by lost or stolen cards, which currently requires individuals to apply for replacements either online or in person.

“We believe that this modern approach will meet the needs of our constituents in a more efficient manner,” Social Security Administration acting commissioner Lee Dudek said in a statement.

The agency declined to provide more details the rollout, which is scheduled to become available early this summer.

Every adult’s Social Security number has likely already been breached, according to Velasquez. The size of the 2024 National Public Data breach prompted some experts to speculate every American could have been affected. The 2017 Equifax breach was estimated to have affected roughly half the U.S. population.

The new process will raise questions as to how to protect both the Social Security numbers and the devices on which they are accessed, she said.

Ultimately, the U.S. in the future will likely move toward a federated identity system, where a user’s identity can be verified with biometric data like fingerprints and facial recognition that is linked across multiple systems, said Cliff Steinhauer, director of information security and engagement at The National Cybersecurity Alliance.

“There’s going to be a future where there’s a clean internet, where everyone that uses it has authenticated with this federated, proven identity so that nobody can pretend to be anybody else,” Steinhauer said.

The Social Security Administration’s move is a first step toward digital identification, though it does not appear to include biometric authentication, he said.

Because there will be risk for fraud, it will be important for the Social Security Administration to make sure its systems are properly protected, Steinhauer said. There should also be phishing-resistant authentication installed to ensure that only authorized individuals access the accounts, he said.

It will be important for individuals to verify that any messages that allegedly come from the Social Security Administration do, in fact, take them to a verified Social Security website.

Any messages the agency sends out, such as a reminder to log in and check an account, could be copied for phishing purposes, Steinhauer said.

As of Monday, the U.S. Department of Education is restarting “involuntary collections” on federal student loans that are in default, which may seriously damage the credit scores of millions of borrowers.

Student loan collections efforts have largely been on pause since the pandemic began in March 2020. A new analysis by TransUnion found that consumers who faced default in recent months have seen their credit scores fall by 63 points, on average. For super prime borrowers — or those with credit scores above 780 — who were seriously delinquent, scores sank as much as 175 points. Credit scores typically range between 300 and 850.

“Consumers may find themselves shocked by the dramatic and immediate impact that a default can have on their credit scores,” Joshua Trumbull, senior vice president and head of consumer lending at TransUnion, said in a statement.

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The credit score implications worsen for borrowers with better scores, research shows. “The bigger they are, the harder they fall,” said Ted Rossman, senior industry analyst at Bankrate.

Because borrowers in less risky credit tiers typically have fewer dings on their credit, any derogatory mark “has the potential to have a significant and jarring impact,” according to TransUnion. In general, the higher your credit score, the better off you are when it comes to getting a loan. 

“Somebody with excellent credit could see a drop of 100 points or more — that’s massive,” Rossman said. “That’s going to make it hard to even get credit and if you do, you will face a sharply higher interest rates on everything from mortgages to car loans.”

As collection activity resumes, the federal government can seize some or all of certain federal payments including tax refunds and Social Security benefits as well as withhold a portion of borrowers’ paychecks.

“Borrowers who don’t make payments on time will see their credit scores go down, and in some cases their wages automatically garnished,” U.S. Secretary of Education Linda McMahon wrote in a Wall Street Journal op-ed last month.

The Federal Reserve Bank of New York cautioned in a March report that student loan borrowers who are late on their payments could see their credit scores sink by as much as 171 points. 

Initially, those borrowers benefitted from the pandemic-era forbearance on federal student loans, which marked all delinquent loans as current. Median credit scores for student loan borrowers rose by 11 points between the end of 2019 to the end of 2020, the Fed researchers found. However, that relief period officially ended on Sept. 30, 2024.

“We expect to see more than nine million student loan borrowers face substantial declines in credit standing over the first quarter of 2025,” the Fed researchers wrote in a blog post.

“Although some of these borrowers may be able to cure their delinquencies,” the Fed researchers said, “the damage to their credit standing will have already been done and will remain on their credit reports for seven years.”

Lower credit scores could result in reduced credit limits, higher interest rates for new loans and overall lower credit access, the researchers also said.

Both VantageScore and FICO reported a drop in average scores starting in February as early- and late-stage credit delinquencies rose sharply, driven by the resumption of student loan reporting. Borrowers who are late on their payments could see their credit scores tank by as much as 129 points, VantageScore reported at the time.

Currently, around 42 million Americans hold federal student loans and roughly 5.3 million borrowers are in default, according to the Education Department. Another 4 million borrowers are in “late-stage delinquency,” or over 90 days past due on payments.

One in five student loan borrowers were reported as being over 90 days past due by the end of February, the data from TransUnion showed.

“It’s surprising how many people who should be paying have been reported as not paying,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion, and those “delinquencies will likely tick higher.”

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