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Interest Rates

Topic

The cost of borrowing money, currently a concern for the US due to high national debt and significant sell-offs in treasuries, with expectations of potential further increases before stabilization.

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7/19/2025, 10:27:26 PM

entitydetail.last_updated

7/26/2025, 5:08:09 AM

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7/19/2025, 10:49:13 PM

Summary

Interest rates represent the cost of borrowing or the return on lending money, calculated as a proportion of the principal amount over a specific period, influenced by factors like the principal sum, duration, and compounding frequency. They reflect an economic preference for present income over future income. In the context of US fiscal policy, the passage of "The Big Beautiful Bill" by The House, which makes the TCJA Tax Cuts permanent, is projected by the CBO to significantly increase the US National Debt. This situation creates a dilemma for The Senate and could compel the Federal Reserve, led by Chair Jerome Powell, to raise interest rates to manage the debt, especially amidst global economic concerns like instability in Japan's bond market. Despite these pressures, the Federal Reserve held its benchmark overnight interest rate steady at 4.25%-4.50% in June 2025, though policymakers signaled potential cuts later in the year, forecasting a 3.75%-4% range by year-end. Scaling energy production is seen as crucial for economic growth and addressing national debt, which in turn impacts the broader economic environment influencing interest rates.

Referenced in 1 Document
Research Data
Extracted Attributes
  • Definition

    The cost of borrowing or the return on lending money, calculated as a proportion of the principal amount over a specific period.

  • Common Period

    Annual, though rates can apply over shorter periods like months or days.

  • Economic Principle

    An index of the preference for present income over future income, as borrowers pay a fee for immediate access to funds.

  • Calculation Factors

    Principal sum, duration of the loan or deposit, and compounding frequency.

  • Average 30-year Mortgage Rate (2021)

    3.0%

  • Average 30-year Mortgage Rate (2024)

    6.7%

  • Average 10-year Treasury Yield (2024)

    4.2%

  • Average Federal-funds Rate (2010-2019)

    0.6%

  • Average 30-year Mortgage Rate (2017-2019)

    4.2%

  • Average 30-year Mortgage Rate (June 2025)

    6.8%

  • Average 10-year Treasury Yield (2010-2019)

    2.4%

  • Average 10-year Treasury Yield (June 2025)

    4.3%

  • Federal-funds Rate Target Range (June 2025)

    4.25%-4.50%

  • Average 15-year Fixed Mortgage Rate (July 2025)

    5.86%

  • Average 30-year Fixed Mortgage Rate (July 2025)

    6.72%

Timeline
  • Federal Reserve began holding rates between 5.25% and 5.5%. (Source: Web Search)

    2023-07-01

  • Federal Reserve concluded holding rates between 5.25% and 5.5%. (Source: Web Search)

    2024-08-31

  • Federal Reserve began implementing three rate cuts, totaling one percentage point, which continued through December 2024. (Source: Web Search)

    2024-09-01

  • The U.S. central bank held interest rates steady, keeping its benchmark overnight interest rate in the 4.25%-4.50% range. (Source: Web Search)

    2025-06-18

  • Federal Reserve policymakers signaled borrowing costs are still likely to fall in 2025, forecasting two cuts resulting in a 3.75%-4% rate range by the end of the year. (Source: Web Search)

    2025-06-18

  • Current average 30-year fixed-rate mortgage is 6.72% and 15-year fixed-rate mortgage is 5.86% according to Freddie Mac's latest weekly rate survey. (Source: Web Search)

    2025-07-16

  • National Association of Realtors projects the average 30-year fixed interest rate to settle at 6.4%. (Source: Web Search)

    2025-Q3

  • Mortgage Bankers Association had the highest forecast for 30-year fixed interest rate at 6.8%. (Source: Web Search)

    2025

  • The House passes 'The Big Beautiful Bill' making TCJA Tax Cuts permanent, projected by the CBO to add trillions to the US National Debt, potentially forcing the Federal Reserve to raise interest rates. (Source: Related Documents)

    Undated

Wikipedia
View on Wikipedia
Interest rate

An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited, or borrowed. The annual interest rate is the rate over a period of one year. Other interest rates apply over different periods, such as a month or a day, but they are usually annualized. The interest rate has been characterized as "an index of the preference . . . for a dollar of present [income] over a dollar of future income". The borrower wants, or needs, to have money sooner, and is willing to pay a fee—the interest rate—for that privilege.

Web Search Results
  • Will Interest Rates Go Down in July? | Predictions 2025

    Compare mortgage and refinance rates. Start here (Jul 16th, 2025) Mortgage interest rate FAQ -------------------------- What are current mortgage rates? Current mortgage rates are averaging 6.72% for a 30-year fixed-rate loan and 5.86% for a 15-year fixed-rate loan, according to Freddie Mac’s latest weekly rate survey. Your individual rate could be higher or lower than the average depending on your credit score, down payment, and the lender you choose to work with, among other factors. [...] National Association of Realtors sits at the low end of the group, projecting the average 30-year fixed interest rate to settle at 6.4% for Q3. Meanwhile, the Mortgage Bankers Association had the highest forecast of 6.8%. [...] Mortgage rates fluctuated significantly in 2023, with the average 30-year fixed rate going as low as 6.09% and as high as 7.79%, according to Freddie Mac. That range narrowed in 2024, spreading from 6.08% to 7.22%. Find your lowest mortgage rate. Start here (Jul 16th, 2025)

  • How Much Will the Fed Cut Interest Rates? - Morningstar

    The 10-year Treasury yield averaged 2.4% from 2010 to 2019, compared with an average 4.2% in 2024 (and 4.3% as of June 2025). The federal-funds rate was near zero much of the time, averaging 0.6% from 2010 to 2019. And we did see interest rates tick up toward the end of the decade, but only slightly: The 10-year averaged 2.5% from 2017 to 2019, and the federal-funds rate averaged 1.7%. Read More: Interest Rates, Inflation, and the Economy ----------------------------------------------------- [...] Instead, interest rates are determined by underlying currents in the economy, like aging demographics, slower productivity growth, and higher economic inequality. These forces have acted to push down interest rates in the US and other major economies for decades, and they haven’t gone away. [...] For example, the 30-year mortgage rate stood at 6.8% as of June 2025 (and averaged 6.7% in 2024). That’s a massive jump compared with the 3.0% average in 2021 and far above the 4.2% average in the prepandemic years (2017-19). This increase has helped slow demand for new homes and thus reduce homebuilding activity, which is a major engine of economic growth.

  • Best CD Rates Of July 2025 - Up to 4.60% - Bankrate

    | --- | --- | --- | | 06/03/2025 | 4.20% | 1.72% | | 05/20/2025 | 4.20% | 1.70% | | 05/06/2025 | 4.05% | 1.70% | | 04/16/2025 | 4.05% | 1.65% | | 04/01/2025 | 4.15% | 1.65% | | 03/04/2025 | 4.15% | 1.55% | | 02/18/2025 | 4.15% | 1.54% | | 02/04/2025 | 4.20% | 1.54% | | 01/07/2025 | 4.10% | 1.43% | | 12/03/2024 | 4.25% | 1.42% | | 11/05/2024 | 3.35% | 1.42% | | 10/22/2024 | 3.45% | 1.42% | | 10/01/2024 | 3.55% | 1.42% | | 09/24/2024 | 3.65% | 1.43% | | 09/17/2024 | 3.85% | 1.43% | [...] | --- | --- | --- | | 06/03/2025 | 4.20% | 1.72% | | 05/20/2025 | 4.20% | 1.70% | | 05/06/2025 | 4.05% | 1.70% | | 04/16/2025 | 4.05% | 1.65% | | 04/01/2025 | 4.15% | 1.65% | | 03/04/2025 | 4.15% | 1.55% | | 02/18/2025 | 4.15% | 1.54% | | 02/04/2025 | 4.20% | 1.54% | | 01/07/2025 | 4.10% | 1.43% | | 12/03/2024 | 4.25% | 1.42% | | 11/05/2024 | 3.35% | 1.42% | | 10/22/2024 | 3.45% | 1.42% | | 10/01/2024 | 3.55% | 1.42% | | 09/24/2024 | 3.65% | 1.43% | | 09/17/2024 | 3.85% | 1.43% | [...] | --- | --- | --- | | 06/03/2025 | 2.25% | 1.72% | | 05/06/2025 | 2.25% | 1.70% | | 04/01/2025 | 2.25% | 1.65% | | 03/04/2025 | 2.25% | 1.55% | | 02/04/2025 | 2.25% | 1.54% | | 01/07/2025 | 2.25% | 1.43% | | 10/01/2024 | 2.25% | 1.42% | | 09/03/2024 | 2.25% | 1.43% | | 08/06/2024 | 2.25% | 1.44% | | 07/02/2024 | 2.25% | 1.42% | | 06/18/2024 | 2.25% | 1.44% |

  • Mortgage Rates Forecast For 2025: Experts Predict When ... - Forbes

    After holding rates between 5.25% and 5.5% between July 2023 and August 2024, the Fed implemented three rate cuts between September and December 2024, totaling one percentage point. The June pause maintains the 4.25% to 4.5% target range and marks the fourth meeting in which policymakers voted to hold the rate steady. [...] While the terms “interest rate” and “annual percentage rate (APR)” are often used interchangeably, they’re not the same. A mortgage interest rate reflects the cost you pay to the lender in return for borrowing money on top of your loan amount. The APR on a mortgage, on the other hand, includes the interest and any other fees or penalties associated with the loan. Because of this, the APR can give you a better idea of how much you’ll pay on a mortgage compared to just the interest rate. [...] The Fed also released its latest economic projections, forecasting an uptick in inflation and unemployment through 2027 compared to March projections. However, 2025’s interest rate path remained consistent, suggesting two cuts are still on the horizon, resulting in a 3.75% to 4% rate range by the end of the year.

  • Fed keeps rates steady but pencils in two cuts by end of 2025

    So far, however, "the unemployment rate remains low, and labor market conditions remain solid," the Fed said in a policy statement that kept its benchmark overnight interest rate in the 4.25%-4.50% range. The decision was approved unanimously. [...] WASHINGTON, June 18 (Reuters) - The U.S. central bank held interest rates steady on Wednesday and policymakers signaled borrowing costs are still likely to fall in 2025, but Federal Reserve Chair Jerome Powell cautioned against putting too much weight on that view, and said he expects "meaningful" inflation ahead as consumers pay more for goods due to the Trump administration's planned import tariffs.