Credit Sesame’s personal finance news roundup March 22, 2025. Stories, news, politics, and events impacting personal finance during the past week.
Fed holds rates steady, slows Treasury cuts
At its March 19, 2025 meeting, the Fed announced it would maintain the Fed funds rate between 4.25% and 4.5%. It cited persistently high inflation as a key reason for not lowering rates. However, the Fed revealed plans to slow the pace at which it reduces Treasury holdings. These holdings had initially expanded to push interest rates lower, and while the Fed has recently been scaling back, it will now proceed more gradually. See Fed announcement at FederalReserve.gov.
Fed projects weakening economy ahead
Each quarter, the Fed issues economic forecasts covering the coming years. Its latest report paints a worsening economic outlook across several areas. Notably, expectations for GDP growth have been lowered for the next three years. The Fed also anticipates increased inflation for the next two years and higher unemployment this year. Interest rate projections remain unchanged, with rate cuts of 0.5% anticipated this year and next. See economic projections at FederalReserve.gov.
Consumer confidence plunges in March 2025
The University of Michigan’s closely watched Index of Consumer Sentiment dropped by 10.5% this month—the third consecutive monthly decline, totaling a 22% drop since December. Future economic expectations have become predominantly negative, falling 15.3% this month and 30% over the past year. Inflation fears strongly influenced this pessimism, with average inflation expectations for the coming year rising from 4.3% to 4.9%. That’s the third consecutive month in which inflation expectations have risen by at least 0.5%. See details at UMich.edu.
Consumer spending stalls in February 2025
Consumer spending grew by only 0.2% last month, significantly below the forecasted 0.6%. Following a 1.2% decline in January, economic activity has had a sluggish start to the year. Consumer spending represents roughly two-thirds of the nation’s Gross Domestic Product. See article at KOAA.com.
Household wealth hits record at end of 2024
Combined net worth for U.S. households and nonprofits increased by around $200 billion in the fourth quarter of 2024, reaching a historic high of $169.4 trillion. Much of this growth was driven by a robust stock market—the largest component of household net worth. Yet, the stock market has since reversed course, erasing about $2.7 trillion from household wealth so far this year. The market has lost a total of about $2.7 trillion since 2025 began. See article at Reuters.com.
Mortgage rates edge higher again
Rates for 30-year mortgages rose slightly for the second consecutive week, increasing by two basis points each week for a total rise of 4 basis points, settling at 6.67%. This uptick ended a seven-week streak of declining rates. However, 30-year rates are 59 basis points above their late-September 2024 low after previously sustained increases. Similarly, 15-year mortgage rates climbed by four basis points over the past two weeks, now standing at 5.83%. See rate details at FreddieMac.com.
Key economic index declines again in March 2025
The Conference Board’s Leading Economic Index (LEI) dropped 0.3% in February, marking its third consecutive monthly decrease and a cumulative decline of 1% over six months. The leading cause was increased consumer pessimism regarding future business conditions. See index details at Conference-Board.org.
Home prices rise despite sales slump
Existing home prices increased by 3.8% year-over-year through February 2025, marking the 20th straight month of annual price gains. This continued rise occurred despite declining overall home sales, which fell by 1.2% over the past year, though February saw a slight uptick. Meanwhile, the inventory of unsold homes grew by 5.1%, potentially easing future price increases. Regionally, the West saw the strongest sales growth in February (13.3%), whereas Northeast sales dropped by 2.0%. See details at NAR.Realtor.
All weekly news headlines from Credit Sesame
All weekly news headlines from Credit Sesame
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