2024 has been a rollercoaster of a year: From continued inflation, student loan relief, the upcoming presidential election, and more, there are many factors affecting every American’s finances.
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Here are five of the most impactful money happenings of 2024 that will likely affect Americans into 2025, according to various sources.
The Federal Reserve Cut the Federal Funds Rate by a Significant 0.5%
On Sept. 18, the Federal Reserve made the decision to cut the federal funds rate by 0.5%. This brings the current federal funds rate down to 4.75-5%. They executed such a significant cut to reach their goal of an overall inflation rate of no more than 2% — and there may be more rate cuts before the end of the year. This will likely result in lower interest rates for mortgages, auto loans, and credit card debt, and savings accounts.
While it remains to be seen, a federal rate cut (especially one so close to the election) typically benefits the incumbent president. While Biden is no longer running for a second term, the benefit may apply to Vice President Kamala Harris’ chances at being elected.
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Inflation Is Coming Down
The U.S. Bureau of Labor Statistics reported that inflation is currently down to 2.5%, which represents a three-year low. Finally, Americans could start to see some relief from pandemic-era inflation when it comes to the price of food, fuel, housing, and more.
Americans Have Accumulated Unprecedented Levels of Debt
According to the Federal Reserve Bank of New York, their Q2 2024 Household Debt and Credit Report indicated that total household debt rose by $109 billion to reach $17.80 trillion. Mortgage balances are up $77 billion (reaching $12.52 trillion), auto loans increased by $10 billion (reaching $1.63 trillion), and credit card balances are up by $27 billion (reaching $1.14 trillion).
It’s clear that Americans are seriously feeling the financial squeeze these days.
There Has Been an Unprecedented Level of Student Loan Debt Relief
Th Biden-Harris administration has championed the highest level of student loan debt relief in U.S. history.
The Center for American Progress reported that under the current administration, the Department of Education has issued nearly $170 billion of loan forgiveness to 4.76 million borrowers. Debt relief has been issued to those who qualify via the Public Service Loan Forgiveness (PSLF) program, those who were defrauded by certain schools and institutions, those enrolled in an income driven repayment plan (IDR), and other targeted groups.
The Upcoming Presidential Election Will Likely Result in a Stock Market Increase
Historically, presidential election years tend to result in a rise in the stock market, according to Fidelity Investments.
However, it’s important not to make any decisions based on emotion, and buy or sell assets based on temporary market swings. If you already have a solid financial investment plan in place, be sure to stick to it. Those who leave their money invested for the long-term usually see more gains than someone who buys and sells assets in the short term.
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This article originally appeared on GOBankingRates.com: 5 Most Surprising Money Facts of 2024
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
