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Interest Rates

Fed Announces First Rate Cut in 11 Years

Federal Reserve Chairman Jerome Powell officially announced a widely expected cut to the federal funds rate yesterday, dropping the central bank's target by a quarter-point to 2%.

Auto Loan Interest Rates Hit 10-Year High

The annual percentage rate on new financed vehicles is expected to average 6.36% in March, compared to 5.66% last year and 4.44% five years ago, according to the latest report from Edmunds.

Stage Set for New-Vehicle Sales Contraction: Edmunds

Auto loan interest rates in June likely reached their highest level in nine years, Edmunds reported, a week after saying a strong economy is likely masking market factors bubbling just below the service that could start to slow down sales.

Fed Reserve Approves Second Rate Hike of 2018

With the labor market continuing to strengthen and economic activity rising at a solid rate, the Federal Reserve raised the Federal Funds Rate a quarter percentage point for the second time this year — putting the target for short-term rates in the 1.75 to 2% range.

Higher Rates Could Hurt Residual Values

Manufacturers may choose to absorb higher federal interest rates on new vehicles to keep prices from rising higher than they have been with heavier incentives, but this could have an adverse effect on residual values.

Rising Interest Rates Pose Little Short-Term Risk

Rising interest rates will have a minimal effect on the used car market today. However, the used-car market is poised to suffer, in the longer term, as federal interest rates continue to rise, one expert said.