Consumer loan and deposit rates are trending higher, but still significantly lagging the Federal Reserve's rate-hike cycle.
Over the course of 2018, the U.S. Federal Open Market Committee raised the benchmark rate a full 1 percentage point, split evenly between four rate hikes. However, interest rates on even the most rate-sensitive loan products have increased by much less.
Average rates on one of the most rate-sensitive products, the home equity line of credit, increased by 69 basis points from before the March 2018 hike to 5.51% as of Jan. 4. Meanwhile, average interest rates on 30-year and 15-year mortgages have increased by 37 basis points and 41 basis points over the same time period, to 4.80% and 4.32%, respectively.
Rates have been even slower to react on the deposit side.
The average rate on a five-year $10,000 CD grew by 48 basis points since the rate hike in March 2018. The average rate for $100,000 in a money market deposit account rose by 19 basis points, while the average rate for a $250,000 MMDA rose 22 basis points. The average rate on $1,000 in a savings account grew by 4 basis points to 0.18%.
According to S&P Global Market Intelligence data, the average rate for a $25,000, 60-month new car loan as of Jan. 4 was 4.42%, up 38 basis points since before the March 2018 rate hike. The average rate on a 36-month used car loan also increased by 38 basis points over the period.
Following the December 2018 rate hike, the Fed said that it will likely increase rates two more times in 2019.
Click here to set alerts for future Data Dispatches.
Click here for a template on depository interest rates by region.
Click here for a webinar on U.S. deposit and loan rates.
Click here for a webinar on S&P Global Market Intelligence's depository pricing ranking report template.