How current interest rates are impacting Coloradans' bank accounts
The Federal Reserve is leaving its benchmark interest rate unchanged for May 2025, which may leave many Coloradans wondering what that will mean for their finances.
The Central Bank announced Wednesday that it's not budging on interest rates, citing solid hiring and easing inflation. This is the Fed's third consecutive meeting holding rates steady after making three cuts in 2024.
CBS
"The Fed has a job to make sure our economy doesn't get too hot or too cold. There's some positives and negatives of high interest rates," Robert Persichitte, MSU Denver Affiliate Accounting Professor, told CBS Colorado. He says there are ways to be prepared for how these rates affect you.
"The negative is, if you're in debt, you're going to have a more difficult time, and it will take you longer to pay it back. If you're living paycheck to paycheck, you might experience a little more instability," said Persichitte.
CBS
So, if you are working to make ends meet, now is the time to make a plan and stick to it.
"It's going to really enforce the essentials of finances and financial planning. If you're saving and building up that emergency fund, you'll likely see higher interest rates in your bank account, so you're getting paid for saving," he said.
And when it comes to saving, every little bit helps, according to Persichitte.
"Start with $1,000, then shift that up to $5,000. It's different for everyone. Scale it up until you're at 3-6 months of expenses. Recurring expenses are going to be the most significant in the long term. You can find a lot of opportunity in those recurring expenses, look through your bank statement and see where that money's coming out, those gym memberships that you don't use or expenses you don't even know you're paying."
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