From credit cards to mortgages, it's expensive to borrow money. The Fed has kept interest rates high to help slow the economy and lower inflation. But we've been waiting for that rate to go down since last summer, and the Fed says cutting too soon could cause inflation to spike.
And it's also possible the Fed is changing its tune on cutting interest rates.
Some economists predicted as many as six cuts starting this summer. But that hope is more uncertain now, with federal reserve chair Jerome Powell saying in a speech last Wednesday at Stanford University that the Fed "face[s] risks on both sides."
"My colleagues and I continue to believe that the policy rate is likely at its peak for this tightening cycle," said Powell. "If the economy evolves broadly, as we expect, most FOMC participants see it as likely to be appropriate to begin lowering the policy rate at some point this year."
In the Fed's eyes, the economy is strong, with the March jobs report showing growth for 39 months straight.
But inflation ticked up slightly in February, and Interest rates are currently holding steady at 5.25%-5.50%, the highest level in more than two decades.
Last week, Minneapolis Fed president Neel Kashkari sparked a frenzy after suggesting rate cuts may be off the table if there's no progress on inflation. He clarified his comments during a Q&A at the University of Montana in Missoula on Monday night.
"What I said was, my best-case scenario is that inflation will continue to fall this year and I jotted down in March that we would have two interest rate cuts over the course of this year," he said. "Then I explained if we don't see any progress on inflation and inflation moves sideways, then that would make me question, 'Why would we cut interest rates?'"
He added, "I think it's unlikely we would raise interest rates from here, but I don't want to rule it out. If inflation surprises us on the upside, that's always possible."
Kishore Kulkarni, an economist with Metro State University of Denver, says all eyes will be on Wednesday's Consumer Price Index Report, which measures inflation by tracking the overall change in the cost of goods.
"Now, if the economy is doing very well again, lowering the interest will make higher demand for loans and that will probably put pressure on inflation in the future," he told Scripps News.
The next Fed meeting is set for April 30, with six more chances for a rate cut this year.
Experts say in the meantime, work on your credit score and get ready to re-finance your mortgage, in case rates are slashed.
US job market remains strong, wages outpacing inflation, data shows
The new job figures show wages are outpacing inflation, but many Americans believe the economy is not in good shape.
