A Fed rate cut is expected and it may save you money. Why most don't care.

The Federal Reserve's expected to lower interest rates again on October 29, but most Americans don't seem to care much even if lower rates could ultimately save them money, according to personal finance app company WalletHub.

Nearly two-thirds (65%) of Americans feel indifferent or unhappy about Fed rate cuts, with 59% saying another quarter-point cut wouldn't make a difference in their lives, said WalletHub's online survey of 200 people between September 29 and October 3.

Those views may be surprising as another rate cut could save consumers billions of dollars, WalletHub said. Credit card rates would fall in tandem with a Fed rate cut and save credit card users at least $1.92 billion in interest over the next 12 months, it estimated. Meanwhile, the average APR on a 48 month new car loan should drop by around 0.12% in the months following a 0.25 percentage point rate cut, it said,

"A second Fed rate cut in as many months will save consumers billions of dollars in the next year alone," said John Kiernan, WalletHub editor. But Americans "still have trillions of dollars in debt, and the interest is still very expensive. Many lenders are also becoming more selective, in response to a dicey economic forecast, so low rates are still hard to come by."

Where are interest rates now and where are they expected to go?

The Fed trimmed its short-term fed funds rate last month by 0.25 percentage point to a range of 4.00% to 4.25%. It was the first drop since December 2024 and done to support a slowing labor market.

CME's FedWatch tool, which tracks the probabilities of an interest rate move at each Fed meeting, shows a 99% chance of another quarter-point rate cut at the next central bank meeting on Oct. 29 dropping the fed funds target range to 3.75% to 4.00%. Another 0.25 percentage point cut is expected, also with almost a 99% probability, at the Dec. 10 meeting , which would bring rates down to 3.50% to 3.75%.Shoppers check out all the items on tables at a sale in Charlottesville, Friday, June 2, 2023 during the annual Historic National Road Yard Sale on U.S. 40. In 2003, the Indiana National Road Association started the national yard sale to promote tourism on the national road, promoting the towns, communities, businesses and the people along U.S. 40.

Why don't people care about rate cuts?

Still, "a lot of people are too preoccupied with inflation to care about a quarter point rate cut," Kiernan said.

A whopping 93% of respondents still see inflation as an issue, WalletHub's survey showed. Forty percent of Americans surveyed said the Fed has a bad job taming it, too.

"The irony is that cutting rates too quickly could reignite inflation," Kiernan said. Lower interest rates make borrowing less expensive, which should fuel spending and the economy. More people chasing goods and services generally leads to higher prices.

Are Americans worried about the job market?

Most Americans (60%) think the economy is getting worse rather than improving and that it's hard to find a job right now, but they generally still see inflation as the scarier bogeyman, WalletHub's survey showed.

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More than 2 in 3 respondents (78%) are more worried about inflation stealing their money than artificial intelligence stealing their job, the survey said.

Where is inflation now and expected to go?

Annual consumer inflation in August rose 2.9%, up from 2.7% in July. The core rate, which excludes the volatile food and energy sectors, gained 3.1%.

August was the last monthly inflation report released by the Bureau of Labor Statistics before the government shutdown began on Oct. 1. When the government closed, all but one of the bureau’s 2,055 employees were furloughed. The September report, which was due Oct. 15, was postponed.

However, though, the government is still shut with no signs of reopening soon, the BLS is making an exception. BLS said it will release September inflation data on Oct. 24 at 8:30 a.m. ET so the Social Security Administration can calculate and release Social Security cost-of-living-adjustment (COLA) information.

Without September's inflation report, annual COLA can't be calculated. Annual COLA is based on average annual increases in the consumer price index for urban wage earners and clerical workers (CPI-W) from July through September.

Wells Fargo economists predict annual September inflation ticked up to 3.1%, and the core rate stayed at 3.1%. "The release date of the September CPI may have changed, but the stubborn state of inflation has not," they said in a report.

Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.

This article originally appeared on USA TODAY: Analysts see a Fed rate cut soon. Most Americans don't care.

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