Finance
Fed interest rate cuts won’t help your credit card debt
Former St. Louis Federal Reserve CEO James Bullard unpacks rate cuts and the labor market on ‘The Claman Countdown.’
Wall Street and Main Street are ready to usher in the fall season with the first interest rate cut since March of 2020, the start of the COVID-19 pandemic, and with this comes the hope of lower borrowing costs.
While it may lower rates for mortgages, auto and personal loans, those carrying credit card debt are likely to be out of luck.
“That’s where the real advice is. Don’t expect the Fed to ride to your rescue”, Ted Rossman, Senior Industry Analyst at Bankrate, told FOX Business. “The change is not going to be that significant. My other big point is that a quarter point, half point, even if credit card rates fell a couple of points, it’s not that much of a difference. Just because rates are so high,” he warned.
Person inserting or removing Visa Credit Card using touch screen credit card payment at a Five Guys restaurant, Queens, New York. (Photo by: Lindsey Nicholson/UCG/Universal Images Group via Getty Images)
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The average annual percentage rate on standard credit cards is about 20.76%, according to Bankrate, with some in-store retail cards, such as Bloomingdale’s, as high as 31.99%.
Federal Reserve Chairman Jerome Powell, in August at the Kansas City Federal Reserve’s Jackson Hole Economic Symposium, set the stage for a September rate cut.
Jerome Powell, chairman of the US Federal Reserve, second right, arrives for dinner during the Jackson Hole economic symposium in Moran, Wyoming, US, on Thursday, Aug. 24, 2023. (Photographer: David Paul Morris/Bloomberg via Getty Images / Getty Images)
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“The time has come for policy to adjust,” Powell said. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” he added.
Nearly 70% of market participants are expecting a 25-basis point cut at the September 18 meeting, with a smaller 30.5% forecasting double that, as tracked by CME’s FedWatch Tool, which measures the probability of future rate moves.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| M | MACY’S INC. | 15.57 | -0.00 | -0.01% |
| V | VISA INC. | 276.19 | +1.85 | +0.67% |
| JPM | JPMORGAN CHASE & CO. | 224.80 | +2.59 | +1.17% |
| DFS | DISCOVER FINANCIAL SERVICES | 138.73 | +1.13 | +0.82% |
| COF | CAPITAL ONE FINANCIAL CORP. | 146.93 | +1.56 | +1.07% |
As an example, for those carrying a $1,000 balance on a credit card, a 25-basis point rate cut may lower your APR to 20.51% vs. 20.76%, according to Bankrate estimates. The drop in the monthly finance charge would be a paltry $0.21 less. Your minimum payment would like remain unchanged, as outlined by Greg McBride, chief financial analyst, Bankrate.
Even if policymakers stick to an easing cycle, it will still take a few rounds to make a meaningful difference.
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“The Fed’s going to be much slower, we think, on the way down than they were on the way up,” cautions Rossman.
Rather than wait for the Fed, Rossman suggests exploring other options.
“Maybe get a 0% balance transfer card or take out a side hustle. Cut your expenses. I mean, there’s other stuff you can do, but fed rate cuts, in and of themselves, aren’t going to make a big difference in the credit card world.”
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The Fed will also meet in November and December to round out the 2024 year.
Dario Amodei, Anthropic CEO, speaking on CNBC’s Squawk Box outside the World Economic Forum in Davos, Switzerland on Jan. 21st, 2025.
Gerry Miller | CNBC
Anthropic is in talks to raise a $3.5 billion funding round, significantly more than the amount previously expected, CNBC has confirmed.
The round would roughly triple the artificial intelligence startup’s valuation to $61.5 billion, according to two sources familiar with the deal, who asked not to be named because the details aren’t public. Lightspeed Ventures is leading the funding, with participation from General Catalyst and others, the sources said.
The financing, which was first reported by the Wall Street Journal, signals continued investor demand for top-tier AI companies, even in the face of potential disruption from China’s DeepSeek. Anthropic is backed by Amazon and Google, and had initially set out to raise $2 billion, according to a source.
Anthropic declined to comment.
The company’s last private market valuation was $18 billion. Amazon has poured $8 billion into the startup.
Anthropic was founded by early OpenAI employees and is the creator of the popular chatbot Claude. Earlier Monday, Anthropic released what it says is it’s “most intelligent AI model yet. Its so-called hybrid model combines an ability to reason — or stopping to think about complex answers — with a traditional model that spits out answers in real time.
JPMorgan Chase CEO Jamie Dimon on Monday said the U.S. government is inefficient and in need of work as the Trump administration terminates thousands of federal employees and works to dismantle agencies including the Consumer Financial Protection Bureau.
Dimon was asked by CNBC’s Leslie Picker whether he supported efforts by Elon Musk’s Department of Government Efficiency. He declined to give what he called a “binary” response, but made comments that supported the overall effort.
“The government is inefficient, not very competent, and needs a lot of work,” Dimon told Picker. “It’s not just waste and fraud, its outcomes.”
The Trump administration’s effort to rein in spending and scrutinize federal agencies “needs to be done,” Dimon added.
“Why are we spending the money on these things? Are we getting what we deserve? What should we change?” Dimon said. “It’s not just about the deficit, its about building the right policies and procedures and the government we deserve.”
Dimon said if DOGE overreaches with its cost-cutting efforts or engages in activity that’s not legal, “the courts will stop it.”
“I’m hoping it’s quite successful,” he said.
In the wide-ranging interview, Dimon also addressed his company’s push to have most workers in office five days a week, as well as his views on the Ukraine conflict, tariffs and the U.S. consumer.
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