Markus Andrews

The Federal Reserve held rates steady at the end of its two-day meeting Wednesday despite pressure from the White House.
High interest rates have affected all sorts of consumer borrowing costs, from auto loans to credit cards. 
For consumers, it generally won’t get less expensive to carry credit card debt, buy a house or purchase a car.

The Federal Reserve announced Wednesday it will leave interest rates unchanged as inflation continues to run above the Fed’s 2% mandate.
The move comes after the central bank cut its benchmark interest rate by a full percentage point last year and in the wake of President Donald Trump’s comment during his first week back in office that he’ll “demand that interest rates drop immediately.”

The latest CNBC Fed Survey showed expectations for only two rate cuts later in the year, the same number penciled in by Federal Reserve officials in their recent forecasts.
“While inflation concerns have significantly abated, they still remain,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. “As a result, it is quite possible that there will be fewer rate cuts over the course of next year than anticipated only a few months ago.”
For consumers struggling under the weight of high prices and high borrowing costs, that means there will be little relief to come. It also means Trump may further challenge the Fed’s independence.
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Inflation has been an ongoing issue since the pandemic, when price increases soared to their highest levels since the early 1980s. The Fed responded with a series of interest rate hikes that took its benchmark rate to its highest level in more than 22 years.

On the campaign trail, Trump said inflation and high interest rates are “destroying our country.”
The federal funds rate, which is set by the U.S. central bank, is the rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates they see every day.
The spike in interest rates caused most consumer borrowing costs to skyrocket, putting many households under pressure.
Even though the central bank has already started cutting its benchmark rate and more rate reductions are on the horizon, consumers won’t see their borrowing costs come down significantly, according to Greg McBride, Bankrate’s chief financial analyst.
“The rate cuts are not going to be big enough or often enough to do the heaving lifting for you,” he said.
From credit cards and mortgage rates to auto loans and savings accounts, here’s a look at where those rates could go in 2025.

Credit cards

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. In the wake of the rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to more than 20% today — near an all-time high.
Annual percentage rates will continue to come down as the central bank reduces rates, but they are only easing off extremely high levels. With only a few potential quarter-point cuts on deck, APRs aren’t likely to fall much, according to Matt Schulz, chief credit analyst at LendingTree.
“Anyone hoping for the Fed to ride in as the cavalry and rescue you from high interest rates anytime soon is going to be really disappointed,” he said.
Try consolidating and paying off high-interest credit cards with a lower-interest personal loan or switching to an interest-free balance transfer credit card, Schulz advised: “A 0% balance transfer credit card can be an absolute lifesaver.”

Mortgage rates

Although 15- and 30-year mortgage rates are fixed, and tied to Treasury yields and the economy, anyone shopping for a new home has lost considerable purchasing power, partly because of inflation and the Fed’s policy moves.
The average rate for a 30-year, fixed-rate mortgage is now just above 7%, according to Bankrate.
Going forward, McBride expects mortgage rates to “spend most of the year in the 6% range,” he said. But since most people have fixed-rate mortgages, their rate won’t change unless they refinance or sell their current home and buy another property. 

Auto loans

Even though auto loans are fixed, payments are getting bigger and less affordable because car prices have been rising along with the interest rates on new loans.
The average rate on a five-year new car loan is 5.3%, according to January data from Edmunds compiled for CNBC.
“With the Fed signaling that any rate cuts in 2025 will be gradual, affordability challenges are likely to persist for most new vehicle buyers,” said Joseph Yoon, Edmunds’ consumer insights analyst.
“The average transaction price of a new vehicle remains near $50,000, driving average loan amounts to record highs,” he said. “Although further rate cuts in 2025 could provide some relief, the continued upward trend in new vehicle pricing makes it difficult to anticipate significant improvements in affordability for consumers in the new year.”  

Student loans

Federal student loan rates are also fixed, so most borrowers aren’t immediately affected by any Fed moves.
However, undergraduate students who took out direct federal student loans for the 2024-25 academic year are paying 6.53%, up from 5.50% in 2023-24. Interest rates for the upcoming school year will be based in part on the May auction of the 10-year Treasury note.
Private student loans tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means those borrowers are typically paying more in interest. How much more, however, varies with the benchmark.

Savings rates

While the central bank has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate.
In recent years, top-yielding online savings accounts have offered the best returns in more than a decade and still pay nearly 5%.
“While the Fed putting the brakes on interest rate cuts stinks for those with debt, it is welcome news for savers,” Schulz said. “That means that it is still a really opportune time to shop for a high-yield savings account. Sure, you’ve missed out on the peak, but there are still plenty of good returns to be found.”

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About 25% of respondents would use a credit card to pay for an emergency and pay off the card over time, according to a new report by Bankrate.
Paying off unexpected expenses with credit should be “a last resort,” said certified financial planner Clifford Cornell, an associate financial advisor at Bone Fide Wealth in New York City.

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People who use a credit card to cover an emergency expense are solving only part of the problem.
Why? Because while using a credit card for emergencies can be helpful in the short term, carrying a balance can lead to significant interest charges if not paid off quickly. 

About 25% of respondents said they would use a credit card to pay for an emergency expense and pay off the card balance over time, according to a new report by Bankrate. That is up from 21% in 2024.
The site polled 1,039 adults in early December.
Paying off unexpected expenses with credit should be “a last resort,” said certified financial planner Clifford Cornell, an associate financial advisor at Bone Fide Wealth in New York City.
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If you don’t pay the balance off, you’re faced with high-interest rate debt. The average annual percentage rate for credit cards is now about 20%, according to Bankrate data.

Let’s say your home water heater breaks — a repair that costs $600 on average, per SoFi. If you put that cost on a credit card with a 20% interest rate, you will pay about $10 in interest if you can’t zero out the balance after a month, according to a Bankrate calculator.
Make only the minimum payments toward that debt, and it will take you more than five years to pay it off, Bankrate estimates. That means you’ll pay nearly $400 in interest.
“Using your credit card to pay for ’emergency expenses’ is just incredibly expensive,” CFP Lee Baker, founder, owner and president of Claris Financial Advisors in Atlanta. He’s also a member of CNBC’s Financial Advisor Council.
Imagine you’re paying this debt off and a new emergency comes up, compounding the problem: “While the timing of these instances can be uncertain, the inevitability of them is not,” said Mark Hamrick, a senior economic analyst at Bankrate.

Who uses credit cards for emergencies

Individuals who lean on credit cards in emergencies might not have enough savings to cover the tab, experts say.
While “there’s a reason they’re in that position to begin with,” it might not necessarily be rooted in poor financial decisions, Baker said.
“It could be someone younger who has simply not had the time to build up some emergency savings,” he said.

In fact, the same Bankrate report found that only 28% of Gen Z adults — or those of ages 18 to 28 — can pay for a $1,000 surprise expense in cash.
Instead, the group is more likely to pay an unexpected cost with a credit card and pay it off over time.
About 27% of Gen Z adults will finance an emergency on a credit card, compared with 25% of millennials, or adults ages 29 to 44, according to Bankrate data provided to CNBC. 
To compare, 25% of Gen X — adults ages 45 to 60 — would pay for an unexpected cost with a credit card while 21% of baby boomers — those ages 61 to 79 — would do the same. 

Experts urge individuals to create an emergency fund, whether that means putting away even a small amount in a separate account every month. 
Advisors suggest that people should aim for three to six months’ worth of living expenses in case you have big unexpected expense, suffer from a job loss or face major medical bills. But saving that much money “can be a very daunting task,” Baker said.
Instead, “think of it like a ladder” and break it down into smaller, achievable goals to gain momentum, he said.
In the end, “having that cash reserve will really provide a lot of peace of mind,” Cornell said.

What to do if you need credit for an emergency

If you’re in a situation where you do not have enough emergency savings and need to rely on a credit card, “you’re going to want to pay that down as quickly as possible” to avoid high interest tacking onto the original balance, Cornell said.
If you can’t, Baker says to “absolutely avoid paying [just] the minimum.” Attempt to break the cost into two or three larger payments to avoid incurring as much interest, he said.
A third option to consider is a potential 0% balance transfer card. If you qualify, the card often allows you to pay off the outstanding balance for a set period of time with zero interest, Baker said.
“It can be a terrific opportunity, but you [have] to use it wisely,” he said. More

Chubb said it expects to see $1.5 billion in net pretax costs in the first quarter related to the recent California wildfires.
Chubb has reduced its exposure by 50% in the wildfire area, CEO Evan Greenberg said on the company’s fourth-quarter earnings call.
During the call, Greenberg touted 2024 as an “outstanding year” for the company’s business. Chubb has been making a mark by focusing on insuring more affluent customers.

Chubb CEO Evan Greenberg
Scott Mlyn | CNBC

California is a tough market for insurers — and growing more so, according to Chubb CEO Evan Greenberg.
The executive has long proclaimed that Chubb won’t write insurance where it can’t get a reasonable return for taking on risk. And it’s that approach that helped it report strong 2024 results.

“We had a great quarter, which contributed to an outstanding year. In fact, the best in our company’s history,” Greenberg told analysts on the company’s fourth-quarter earnings call.
Chubb shares are trading 3% higher on Wednesday. The stock has risen 13% over the past year, but has been under pressure this month as the Los Angeles area battled costly wildfires. Chubb, along with Allstate and Travelers, are among the publicly traded insurers expected to have some of the greatest exposure.

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Chubb shares over the past year

Greenberg kicked off the company’s earnings call immediately addressing its exposure to the disaster. Right now, it expects to see $1.5 billion in net pretax costs in the first quarter.
Chubb had reduced its exposure by 50% in the areas where wildfires occurred, he said.
The state, as well as consumer advocacy groups, are preventing insurers from charging premiums that truly reflect the risks in the area, he said, explaining that the artificially suppressed prices are only encouraging people and companies to opt for riskier places to live and work.

“Frankly, it’s an unsustainable model, and one way or the other, the citizens of the state paid for the price for coverage,” he said. “California is not alone in this regard, but it certainly stands out.”

Best. Year. Ever.

Greenberg expressed confidence in Chubb’s ability to manage the risks the industry faces.
“While we’re in the risk business and there’s plenty of uncertainty in the world, we’re confident in our ability to continue growing operating earnings and EPS at a double-digit rate, tax and [foreign exchange] notwithstanding. Our earnings growth will come from three sources: [property and casualty] underwriting, investment income and life income.”
He said he expects the industry is in a period of sustained inflation – and so rates are rising just to stay steady, which may not affect margin improvement.

Why size matters

Greenberg said Chubb is positioned competitively to grow its commercial middle-market lines, which serve companies smaller than $1 billion, because there’s a lot of change in climate and catastrophe events and growth in litigation. Regional and mutual insurers “have a harder time” in this area, he said.
“They’re not equipped with the data, with the balance sheet, with depth of business in reinsurance relationships to be able to … compete the same way,” he said.
On multiple metrics, the company is seeing bragworthy growth.
P&C underwriting income rose 7% in 2024 from the prior year, with a combined ratio of 86.6%. Global P&C premiums written grew almost 10% during the same period, with life premiums jumping 18.5% in constant dollars.
During the latest quarter, Chubb reported net income of $2.58 billion, or $6.33 per share. Excluding items, it earned $6.02 per share. Net investment income rose 13.7% to $1.69 billion on an adjusted basis.
Chubb has been making its mark by insuring more affluent customers, and that contributed to its fourth-quarter strength. Premium growth in this segment rose 10%, including a 34% bump in new business, the company said.
“Premiums in our true high net worth segments, the group that seeks our brand for the differentiated coverage and service we are known for, grew 17.6%,” it added.
Homeowners pricing rose more than 12% for the quarter and ahead of loss costs.
Chubb, the market leader in crop insurance, said agriculture premiums fell a bit because of lower commodity prices and a change in the risk formula with the U.S. government.
Correction: Chubb shares were trading higher Wednesday. An earlier version misstated the day.

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Many taxpayers are eager to file returns to collect a refund, but it’s important to gather the necessary tax forms first.
Filing an incomplete return could flag the IRS system, delay processing or trigger an audit, experts say.
Here’s a checklist of the key tax forms for 2024 filings and when to expect them.

Catherine Ivill – Ama | Getty Images Sport | Getty Images

Many taxpayers are eager to file returns quickly to collect a refund, but it’s important to gather the necessary tax forms first, experts say.
Every year, employers and financial companies report income and other activity on so-called information returns, such as W-2s and 1099s, with a copy going to taxpayers and the IRS.

The agency has “very sophisticated software” that compares information returns to what’s reported on your filing, said Elizabeth Young, director of tax practice and ethics for the American Institute of Certified Public Accountants, or AICPA.
Your return can be “flagged for audit” when there’s a mismatch, she said. 
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While the IRS issues most tax refunds within 21 days, some returns may require “additional review” and can take longer, according to the agency.
Here’s a breakdown of the key tax forms you’ll need to minimize that risk as you file your return this season — and when to expect them.

When to expect tax forms 

Although many tax forms come in January, others may take until mid-February to March or longer, according to the AICPA. Typically, investment statements are among the last forms to arrive, especially for more complicated assets.

For earnings, your tax forms may include a W-2 for wages, 1099-NEC for contract or gig economy work, 1099-G for unemployment income and 1099-R for retirement plan distributions. 
However, your return should reflect income even when you don’t receive a tax form, Young said. 
“If you earn it, it’s reportable,” she said. “You’re accountable for it.”

Other forms can help secure tax credits and deductions.
You can claim an “above-the-line deduction” even if you don’t itemize tax breaks. Tax forms for these may include a 1098-E for student loan interest, 5498 for individual retirement account contributions or 5498-SA for health savings account deposits. 
If itemized tax breaks exceed the standard deduction, you may need a 1098 for mortgage interest, your annual giving statement or property tax credits. 
You also may need a 1098-T for education tax breaks or receipts to claim the child and dependent care tax credit.    

‘Check your mail routinely’ 

As your tax forms arrive, it’s important to stay organized, said certified public accountant Brian Long, senior tax advisor at Wealth Enhancement in Minneapolis.
“Check your mail routinely,” he said. However, some forms may come digitally, so you’ll want to check your online accounts periodically for updates.
You can use your “prior-year tax return as a checklist,” Long said. But keep in mind that you may need fewer or more tax forms this season, depending on your situation. 

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President Donald Trump ordered a temporary freeze on federal aid in an effort to review funding for causes that don’t align with his agenda.
The Education Department said the freeze will not affect federal Pell Grants and student loans.

The White House on Monday ordered a pause on federal grants and loans, according to a memo, but the Department of Education said the freeze will not affect student loans or financial aid for college.
The freeze, which could affect billions of dollars in aid, noted an exception for Social Security and Medicare. The pause “does not include assistance provided directly to individuals,” according to the memo.

The pause gives the White House time to review government funding for causes that don’t fit with President Donald Trump’s policy agenda, according to Matthew J. Vaeth, acting director of the White House Office of Management and Budget.
The memo specifically cited “financial assistance for foreign aid, non-governmental organizations, DEI, woke gender ideology, and the green new deal.”

What student aid may be affected

The U.S. Department of Education said the freeze on federal aid will not affect federal Pell Grants and student loans. It also has no bearing on the Free Application for Federal Student Aid for the upcoming year.
“The temporary pause does not impact Title I, IDEA, or other formula grants, nor does it apply to Federal Pell Grants and Direct Loans under Title IV [of the Higher Education Act],” Education Department spokesperson Madi Biedermann said in a statement.
In addition to the federal financial aid programs that fall under Title IV, Title I provides financial assistance to school districts with children from low-income families. The Individuals with Disabilities Education Act, or IDEA, provides funding for students with disabilities.

The funding pause “only applies to discretionary grants at the Department of Education,” Biedermann said. “These will be reviewed by Department leadership for alignment with Trump Administration priorities.”

The pause could affect federal work-study programs and the Federal Supplemental Educational Opportunity Grant, which are provided in bulk to colleges to provide to students, according to higher education expert Mark Kantrowitz.
However, many colleges have already drawn down their funds for the spring term, so this might not affect even that aid, he said. It may still affect grants to researchers, which often include funding for graduate research assistantships, he added.

Why the freeze caused confusion

“While the memo says the funding pause does not include assistance ‘provided directly to individuals,’ it does not clarify whether that includes money sent first to institutions, states or organizations and then provided to students,” said Karen McCarthy, vice president of public policy and federal relations at the National Association of Student Financial Aid Administrators.
Most federal financial aid programs are considered Title IV funds “labeled for individual students” and so would not be affected by the pause, McCarthy said, but all other aid outside Title IV is unclear. “We are also researching the impact on campus-based aid programs since they are funded differently,” she said.
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“When you have programs that are serving 20 million students, there are a lot of questions, understandably,” said Jonathan Fansmith, a senior vice president at the American Council on Education. “It is really, really damaging for students and institutions to have this level of uncertainty.”
Ted Mitchell, president of the American Council on Education, called on the Trump administration to rescind the memo.
“This is bad public policy, and it will have a direct impact on the funds that support students and research,” he said. “The longer this goes on, the greater the damage will be.” More

The Social Security Fairness Act will provide benefit increases to more than 3 million individuals.
But it’s uncertain when they will see that money.
Here’s what the agency says affected beneficiaries should do in the meantime.

Maskot | Getty Images

More than 3.2 million people will see increased Social Security benefits, under a new law.
However, individuals who are affected may have to wait more than a year before they see the extra money that’s due to them from the Social Security Fairness Act, the Social Security Administration said in an update on its website.

“Though SSA is helping some affected beneficiaries now, under SSA’s current budget, SSA expects that it could take more than one year to adjust benefits and pay all retroactive benefits,” the agency states.
The Social Security Fairness Act eliminates two provisions — known as the Windfall Elimination Provision and Government Pension Offset — that previously reduced Social Security benefits for certain beneficiaries who also had pension income provided from employment where they did not contribute Social Security payroll taxes.
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Those provisions reduced benefits for certain workers including state teachers, firefighters and police officers; federal employees who are covered by the Civil Service Retirement System; and individuals who worked under a foreign social security system.
The law affects benefits paid after December 2023. Consequently, affected beneficiaries will receive increases to their monthly benefit checks, as well as retroactive lump sum payments for benefits payable for January 2024 and after.

The benefit increases “may vary greatly,” depending on an individual’s type of Social Security benefits and the amount of pension income they receive, according to the Social Security Administration.
“Some people’s benefits will increase very little while others may be eligible for over $1,000 more each month,” the agency states.

The Social Security Administration said it cannot yet provide an estimated timeline for when the benefit adjustments will happen.
In the meantime, the agency is advising beneficiaries to update their mailing address and bank direct deposit information, if necessary. In addition, noncovered pension recipients may now want to apply for benefits, if they are newly eligible following the enacted changes.

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The 2025 tax season opened for individual filers on Jan. 27.
This season, many qualify for free filing options, such as Direct File, IRS Free File or Volunteer Tax Assistance.
Those affected by natural disasters, such as California wildfire victims, may have extensions to file and pay.

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Many taxpayers qualify for free filing options 

If you’re eager to file your taxes for free, there are several options for your 2024 filing, according to financial experts.
This season, more than 30 million taxpayers may be eligible for Direct File, the IRS’ free tax filing program, according to the U.S. Department of the Treasury. 

Direct File has expanded to 25 states and “will cover more tax situations than last year,” former IRS Commissioner Danny Werfel told reporters during a press call in early January.

Another option, IRS Free File, offers free guided tax prep software if your adjusted gross income, or AGI, was $84,000 or less in 2024.
An estimated 70% of taxpayers qualify for IRS Free File, but only a fraction of eligible filers use it, according to Tim Hugo, executive director of the Free File Alliance.
Many filers also qualify for more guidance via Volunteer Income Tax Assistance, or VITA, a free IRS-run program. You’re generally eligible with an AGI of $67,000 or less.

Tax relief for natural disaster victims

While the federal tax deadline is April 15 for most filers, some tax filers, including California wildfire victims, have extensions to file returns and pay taxes owed. The IRS provides a detailed breakdown of IRS tax relief by date.
Congress in December also extended tax relief for certain victims affected by federally declared natural disasters from 2020 to early 2025. As a result, some filers could qualify for a bigger tax break for losses. 

Missing forms could delay your return 

While it may be tempting to file your return quickly, it is important to gather the necessary tax forms first, according to certified public accountant Brian Long, senior tax advisor at Wealth Enhancement in Minneapolis. Otherwise, the IRS systems could flag your return for missing or inaccurate information, which could delay processing.
However, you can use your “prior-year tax return as a checklist” for accuracy, Long added.
While many tax forms arrive in January, others may come between mid-February and March or later, experts say. More