The Federal Reserve is expected to hold interest rates steady at the end of its two-day meeting next week, despite President Donald Trump’s comments Thursday that he’ll “demand that interest rates drop immediately.”

So far, the central bank has moved slowly to recalibrate policy after hiking its key benchmark 5.25 percentage points between 2022 and 2023 in an effort to fight inflation, which is still running above the Fed’s 2% mandate. On the campaign trail, Trump said inflation and high interest rates are “destroying our country.”

But for consumers struggling under the weight of high prices and high borrowing costs, there is little relief in sight, for now.

“Anyone hoping for the Fed to ride in as the cavalry and rescue you from high interest rates anytime soon is going to be really disappointed,” said Matt Schulz, LendingTree’s chief credit analyst. 

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The Federal funds rate, which the U.S. central bank sets, is the rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates consumers see every day.

Once the Fed funds rate eventually comes down, consumers may see their borrowing costs decrease across various loans such as mortgages, car loans and credit cards, making it cheaper to borrow money. 

Here’s a breakdown of how it works:

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. But even though the central bank cut its benchmark interest rate by a full percentage point last year, credit card costs remained elevated.

Card issuers are often slower to respond to Fed rate decreases than to increases, said Greg McBride, Bankrate’s chief financial analyst.

Currently, the average credit card rate is more than 20%, according to Bankrate — near an all-time high.

In the meantime, delinquencies are higher and the share of credit card holders making only minimum payments on their bills recently jumped to a 12-year high, according to a Philadelphia Federal Reserve report.

“That means it is maybe more important than ever to get that high-interest debt under control,” Schulz said.

Mortgage rates have risen in recent months, even as the Fed cut rates.

Because 15- and 30-year mortgage rates are fixed and mostly tied to Treasury yields and the economy, they are not falling in step with Fed policy. Since most people have fixed-rate mortgages, their rate won’t change unless they refinance or sell their current home and buy another property. 

“Most mortgage debt is fixed, so existing homeowners are not impacted,” Bankrate’s McBride said. “It just adds to the affordability woes for would-be homebuyers and is keeping home sales on ice.”

The average rate for a 30-year, fixed-rate mortgage is now 7.06%, according to Bankrate.

Auto loan rates are fixed. But these debts are one of the fastest-growing sources of consumer credit outside of mortgage lending. Payments have been getting bigger because car prices are rising, driving outstanding auto loan balances to more than $1.64 trillion.

The average rate on a five-year new car loan is now around 7.47%, according to Bankrate.

“With the Fed signaling that any rate cuts in 2025 will be gradual, affordability challenges are likely to persist for most new vehicle buyers,” said Joseph Yoon, Edmunds’ consumer insights analyst.

“Although further rate cuts in 2025 could provide some relief, the continued upward trend in new vehicle pricing makes it difficult to anticipate significant improvements in affordability for consumers in the new year,” Yoon said. 

Federal student loan rates are also fixed, so most borrowers aren’t immediately affected by any Fed moves.

However, 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. Interest rates for the upcoming school year will be based in part on the May auction of the 10-year Treasury note.

Private student loans tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means those borrowers are typically paying more in interest. How much more, however, varies with the benchmark.

As a result of the Fed’s string of rate hikes in recent years, top-yielding online savings accounts have offered the best returns in more than a decade and still pay nearly 5%, according to McBride.

“The good thing about the Fed being on the sidelines is that savers are going to be able to enjoy these inflation-beating yields for some time to come,” McBride said.

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Many young adults have financial stress, and experts say there’s a simple safety net that could help.

About 61% of surveyed Americans of ages 18 to 35 are financially stressed, according to a new Intuit survey. About 21% of respondents say their stress has gotten worse over the past year.

Some of the biggest stressors included high cost of living, job instability and growing housing costs. Of those who identified as financially stressed, 32% said handling unexpected emergencies like medical bills, car repairs and home maintenance trigger their anxiety with cash, the report found.

The site polled 2,000 adults of ages 18 to 35 in December.

A new report by Bankrate reflects a similar picture. The report found that older generations are more likely to say they could pay for an unexpected $1,000 emergency expense from their savings.

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About 59% of baby boomers, or those of ages 61 to 79, can pay for a $1,000 surprise expense from savings. The cohort is followed by 42% of Gen Xers, or of ages 45 to 60. 

Yet, only 32% of millennials — ages 29 to 44 — and 28% of Gen Z adults — ages 18 to 28 — have the cash readily available, according to the survey, which polled 1,039 respondents ages 18 and older in early December.

“The youngest generations are those who are earliest in their financial journey,” said Mark Hamrick, a senior economic analyst at Bankrate.

Financial emergencies can catch us by surprise, from needing a locksmith because you lost your keys to unexpectedly losing your job. The best thing you can do to prepare is have savings set aside and carefully using lines of credit, experts say.

“For emergencies, it’s really having that cash reserve in place. That is the financial plan,” said certified financial planner Clifford Cornell, an associate financial advisor at Bone Fide Wealth in New York City.

Having an emergency savings fund is like having a bulletproof vest, Hamrick explained.

“They won’t save you in all outcomes, but it’s a good start,” he said.

Many Gen Zers need to gear up. About 80% of the cohort are more likely than other generations to worry about not having enough money to cover living expenses if they lost their primary job, per Bankrate data.

That’s compared to 72% of millennials, 72% of Gen Xers and 58% of baby boomers.

“We’re really setting ourselves up for failure if we don’t have sufficient emergency savings,” Hamrick said.

While interest rates have come down from peak highs, the best high-yield savings accounts offer on average 4.31% annual percentage yields, or APYs, per Bankrate data.

To compare, traditional savings accounts offer a 0.51% APY on average nationwide, per DepositAccounts.

For every $1,000 you add into a HYSA, you can earn about $40 a year in interest at those rates. While $40 doesn’t sound like a lot at first blush, it’s significantly higher than what you’d earn in a traditional savings account, Cornell said. 

There are many HYSAs available. As you consider your options, you want to double-check the one you pick is FDIC-insured, which protects your deposits at insured banks and savings associations if the company fails.

2. Calculate how much you can save every month

Figuring out how much cash you can save will depend on how much money you earn versus spend in a given month, Cornell said. 

Some rules of thumb can be good starting points. For instance, the 50-30-20 rule is a budget framework that allocates 50% of your income toward essentials like housing, food and utilities, 30% toward “wants” or discretionary spending and the remaining 20% to savings and investments.

Yet, it’s not easy to follow, especially for a young person starting out their career — saving 20% of their income can be a tall order, Cornell said.

It’s fine to start off with less, and look for opportunities in your budget to save more. For example, saving part of an annual raise or tax refund.

3. Set a goal

First aim for three months’ worth of expenses as a goal, Cornell said. Once you meet that goal, consider the next: advisors often recommend you ultimately have three to six months, but some people may benefit from even more. In some cases, it’s a year or more.

Imagine having enough cash that can sustain you during a long stretch of unemployment: “It’s kind of like a pillow or a safety blanket,” he said. 

The more variable your income — say, if you depend on commissions or bonuses, or your income fluctuates every month — the more savings you’ll need to hold you over in case something comes up, Cornell said. 

Keep in mind that coming up with enough savings to tide you over for three months can take a long time. While saving so much can be daunting, experts say even having a small buffer of a few hundred dollars can help.

For instance, the Federal Reserve measures how many adults are able to cover a $400 emergency cost, a much lower benchmark.

Even a small level of savings may be enough to cover minor emergencies, or help offset how much you need to borrow.

Many workers hate the prospect of returning to the office five days a week — so much so that they’d quit their jobs if told to come in full-time.

To that point, 46% of workers who currently work from home at least sometimes would be somewhat or very unlikely to stay at their job if their employer scrapped remote work, according to a recent poll by Pew Research Center.

Yet, employers have reined in remote work.

About 75% of workers were required to be in the office a certain number of days per week or month as of October 2024, up from 63% in February 2023, Pew found.

“There’s a certain creeping up” of return-to-office policies, said Kim Parker, director of social trends research at the Pew Research Center.

Companies like Amazon, AT&T, Boeing, Dell Technologies, JPMorgan Chase, UPS and The Washington Post have called at least some employees back to the office five days a week. President Donald Trump signed an executive action on Monday calling federal employees back to their desks “as soon as practicable.”

Similar to the Pew survey, a poll conducted by Bamboo HR found that 28% of workers would consider quitting due to a return-to-office mandate.

The data “underscores how comfortable people have become with this arrangement, and how it really fits in with their lifestyle,” Parker said.

Workers consistently cite a better work-life balance as a “huge benefit” of remote work, Parker said.

Indeed, they see the financial value of hybrid work as being equivalent to an 8% raise, according to research by Nick Bloom, an economics professor at Stanford University who studies workplace management.

Many economists think that the higher prevalence of remote work, relative to the pre-pandemic era, has become an entrenched feature of the U.S. labor market.  

“Remote work is not going away,” Bloom previously told CNBC.

That’s largely because it boost profits for companies: Workers quit less often, meaning employers save money on recruiting and other functions tied to attrition, Bloom said. Meanwhile, data shows that productivity doesn’t suffer in hybrid work arrangements, he said.

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More than 60% of paid, full workdays were done remotely in early 2020, during the Covid-19 pandemic — up from less than 10% before the pandemic, according to WFH Research, a project run jointly by researchers from MIT, Stanford, the University of Chicago and Instituto Tecnológico Autónomo de México.

That share has fallen by more than half. However, it has leveled out between 25% and 30% for about two years, according to WFH Research data.

About 31% of employers reduced remote work opportunities in 2024, down from 43% in 2023, according to according to a ZipRecruiter survey. Yet, another 33% expanded remote work, up from 32% the prior year.

Companies that imposed RTO mandates have annual rates of employee turnover that are 13% higher than those that have become “more supportive” of remote work, ZipRecruiter said.

“The ability to work from anywhere remains a top priority for many professionals,” according to a 2024 poll by consulting firm Korn Ferry of 10,000 workers in the U.S., U.K., Brazil, Middle East, Australia and India.

“Requiring federal employees to come to the office five days a week would result in a wave of voluntary terminations that we welcome,” Elon Musk and Vivek Ramaswamy, who Trump tapped to lead a new Department of Government Efficiency, wrote in a November op-ed. (Ramaswamy has since bowed out of that role.)

Of course, there are also tradeoffs to remote work for businesses and workers.

About 59% of employers cite concerns that remote work harms company culture, according to ZipRecruiter.

About half of workers — 53% — who work from home at least part-time say it “hurts” their ability to feel connected with co-workers, Pew found in a 2023 poll.

“It’s the one big downside we’ve seen consistently,” Parker said.

“That seems to be a tradeoff: You get the work-life balance but lose some connectivity with coworkers,” Parker said.

Even if workers quit, they may not be able to find a job.

The labor market remains strong, with low unemployment and low levels of layoffs, meaning workers have good job security, according to economists. However, companies have also pulled back on hiring, making it a challenging environment for job seekers.