Interest rates are rising for the first time since 2023, with the Federal Open Market Committee announcing its new target range for rates at 3.75% to 4%.
Driving the news: The Fed had held rates steady since January, but stubborn inflation forced the FOMC to act.
The Bureau of Labor Statistics in September estimated the annual inflation rate at 3.4%, with fuel prices spiking during the war in the Middle East.
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Bottom line: Auto rates were already well above the federal rate, with Cox Automotive data showing the average new rates at 9.78% and used rates at 13.99%.
Cox Automotive Chief Economist Jeremy Robb pointed out that, before the Fed’s decision, the most recent data showed a small increase in new rates and used rates remaining steady.
(This is a developing story.)
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