For many, 2025 has felt like a financial pressure cooker.

Inflation may be easing, but prices are still high. Borrowing remains costly, and the personal savings rate—now at 4.6%—falls well behind the 10-year average of 6.9%.

Americans are paying more to stay afloat—whether it’s keeping up with sky-high credit card interest rates, navigating a housing market that refuses to give buyers a break or trying to save money when wages just aren’t stretching as far as they used to.

At the center of it all is one big question: Will things actually get better for consumers—or are we stuck with sky-high interest rates, tighter credit and lagging savings for the foreseeable future?

We break it all down—where things stand, what’s coming next and what it means for your wallet.

CD Rates and Treasury Yields: How To Make the Most of Your Savings in 2025

For savers, 2025 is a moment of opportunity—but also a sign that high rates may not last forever. With some banks still offering certificates of deposit (CDs) with yields exceeding 4.5% and Treasury yields starting to decline from their 2024 highs, consumers face a critical question: Should they lock in rates now?

National average CD rates have remained relatively stable in recent months, with year-over-year gains seen almost across the board.

According to the St. Louis Federal Reserve, the national average rate for a 12-month CD in February 2025 was 1.80%, down slightly from 1.83% a year earlier.

On the flip side, the national rate for a 36-month CD has risen from 4.05% to 4.3% year-over-year, while a 60-month CD now averages 4.4%, compared with 3.9% last year.

Some shorter-term CDs, however, have seen modest increases. The average six-month CD yield rose from 1.53% in February 2024 to 1.63% in February 2025.

The divergence in rates reflects the uncertainty surrounding Federal Reserve policy. Many banks anticipate that the Federal Reserve will cut interest rates later this year, which would lower their borrowing costs. As a result, they’re offering fewer incentives for savers to lock in long-term CDs while still maintaining competitive rates for shorter terms.

While there’s some uncertainty, CD rates and Treasury yields are generally expected to decline in 2025 as the Federal Reserve anticipates lowering interest rates. The Fed’s benchmark rate affects how much banks pay you for keeping money in a savings account. When the Fed plans to lower rates to help the economy, banks usually lower their savings rates, too.

Still, the national average does not tell the full story. Some financial institutions, particularly online banks and credit unions, continue to offer significantly higher rates than the FDIC average. As of March 27, 2025, at least one bank was advertising 4.65% on a six-month CD, according to Forbes Advisor’s latest report.

“If you expect rates to decrease later this year, you would generally want to lock in long-term CDs now,” said Erik Krom, president of Clear Creek Advisors.

Treasury yields, meanwhile, have fallen sharply over the past year, reflecting growing expectations that the Federal Reserve will ease its monetary policy. As of March 26, 2025, the yield on a 12-month Treasury bill stands at 4.10%, down from 5.0% at the same point in March 2024. Three- and six-month Treasury yields have also declined by more than a full percentage point over the same period.

“Some economists are worried about ‘stagflation’—high inflation combined with slowing economic growth,” Krom said. “If the Fed decides to cut rates to support the economy, Treasury yields will likely decline further. On the other hand, if inflation remains a concern, the Fed may hold rates steady, keeping yields elevated.”

Investing in CDs vs. Treasury Yields: Which Is Better?

The decision between a CD and a Treasury bill depends largely on an individual’s financial goals. CDs provide a fixed rate for a set term, making them an attractive option for those who want certainty. Treasury bills, while offering lower rates than last year, remain competitive and provide greater liquidity. Interest from Treasuries is also exempt from state and local taxes, an advantage for high-income investors in states with high tax burdens.

If the Fed begins cutting rates, both CD and Treasury yields will likely decline further. That makes now a potentially advantageous time for savers to lock in higher returns. Some banks may continue offering above-average CD rates in the coming months, but as financial institutions adjust to lower borrowing costs, those promotions may become less frequent.

For those looking to maximize returns while maintaining flexibility, a combination of short-term CDs and short-term Treasuries may be the best approach.

Credit, Debt and Borrowing in 2025: What’s Changing for Consumers?

The cost of borrowing has rarely been this high—or this hard to predict.

That’s because interest rates depend heavily on what the Federal Reserve does next—and right now, it’s unclear whether the Fed will cut rates, hold them steady or respond to new economic changes. This makes it difficult for borrowers to plan ahead, whether they’re dealing with credit cards, mortgages or personal loans.

If you’re carrying a credit card balance, applying for a mortgage or just trying to build credit, 2025 is shaping up to be another year of financial uncertainty. Interest rates remain elevated, lenders are tightening credit standards, and consumers increasingly feel the squeeze of rising debt levels.

Here’s what this may mean for your wallet.

Credit Card Rates: Will Borrowing Get Cheaper?

If you’ve been carrying a credit card balance, you’ve likely felt the sting of sky-high interest rates. According to the Federal Reserve’s G.19 Consumer Credit Report (January 2025), the average APR on credit card accounts with assessed interest in January was 23.37%​.

With an interest rate that high, a borrower carrying a $4,000 balance on a 30-day billing cycle could see a nearly $80 interest charge for each month they don’t pay their balance off in full.

Credit card interest rates are directly tied to the Federal Funds rate, which soared in 2023 and 2024 as the Fed fought inflation. While potential interest rate cuts may provide some relief, most experts agree that credit card APRs may fall, but it won’t be a dramatic dip, as issuers don’t immediately change their rates.

“Most credit card holders have a variable rate that, at its core, changes with the Fed Funds rate,” says Grady Bond, chief retail and lending officer at Travis Credit Union in California. “Currently, most outlooks have the Fed reducing rates this year, so based on that, you would expect overall credit card rates to come down in 2025 from their record highs in 2024.”

People with good or excellent credit scores usually get the lowest advertised credit card interest rates, sometimes in the single digits. Your rate depends on things like your credit history, the card’s terms, the type of transaction (such as balance transfers and cash advances) and changes in market rates. Even with the same card, rates can vary between cardholders. That’s why it’s best to know what APR you’re signing up for and how it could change before applying for a credit card.

Still, for now, credit card interest remains near all-time highs, making it critical for consumers to pay off balances as quickly as possible.

Credit Access: Will It Be Harder to Get a Loan?

If you’ve been rejected for a credit card or a loan recently, you’re not alone. Lenders have been tightening their credit standards, making it harder for some consumers to access financing.

According to the New York Fed’s February 2025 Credit Access Survey, consumers are more pessimistic than ever about their ability to get approved:

John Cabell, managing director of payments intelligence at J.D. Power, sees the credit squeeze continuing.

“We’ve already seen tightening credit standards,” Cabell told Forbes Advisor. “In the most recent Federal Reserve Senior Loan Officer Opinion Survey, banks took action to specifically address credit cards, increasing minimum credit score requirements and lowering limits.”

This is bad news for people who rely on credit cards to cover expenses. With lenders pulling back, some consumers may be forced to rely more on high-cost borrowing options.

Debt Levels: Will Consumers Pay Down Balances or Keep Borrowing?

Household debt in the U.S. continues to rise, with the New York Fed reporting that total household debt hit $18.04 trillion in Q4 2024.

The majority of U.S. household debt—roughly 70%—is tied to mortgages. While this is often seen as “good” debt because it’s backed by property, it still adds to the financial pressure many households are feeling, especially as borrowing costs remain high. In addition to mortgage debt, credit card debt jumped by $45 billion from the previous quarter, reaching a record $1.21 trillion at the end of December 2024.

The trend is clear: Americans are taking on more debt, not less.

As of January 2025, revolving credit—which includes credit cards—has risen at an annual rate of 8.2%, with total outstanding balances reaching $1.325 trillion, according to the Federal Reserve’s G.19 Consumer Credit Report.

“Given the uncertain outlook of the economy and employment, it’s hard to imagine we will see an immediate or significant decline in consumer card debt,” Cabell says.

Bond agrees, pointing out that the overall trend in household debt is unlikely to reverse in 2025. “Since the end of 2020, U.S. households have increased their non-housing debt by almost a trillion dollars. While debt growth slowed to just under 3% in 2024—the lowest percentage growth since 2011—it’s hard to see that turning negative in 2025.”

For borrowers, the remainder of 2025 will see continued high-borrowing costs, stricter credit approvals and growing debt pressures. The best move? Stay ahead of interest rate changes and pay down balances where possible.

The Price of Homeownership: What It Costs To Buy and Borrow

If you’ve felt like buying a home is a game where the rules keep changing, you’re not the only one. The cost of homeownership has been a moving target—between rising prices, fluctuating mortgage rates and a market that’s still feeling the aftershocks of high inflation.

Whether you’re trying to buy your first home, refinance an existing loan or want to understand where the market is headed, here’s what you need to know.

Home Prices: A Softer Market, But Still Rising

After years of surging home prices, the housing market is cooling—though not crashing. As of Q1 2025, the national median home price sits at $451,000, up 3% year-over-year, according to ICE Home Price Index. That’s a much slower pace than early 2024, when prices were climbing at 6% annually.

This shift is largely due to an increase in inventory—27% more homes are on the market than this time last year—giving buyers more options and putting less pressure on prices.

But don’t expect home values to fall off a cliff. Matthew Sanford, AVP of mortgage lending at Skyla Federal Credit Union, predicts prices will continue to rise modestly in 2025, in the 1% to 3% range. This is because although the housing supply is increasing, it’s still not enough to keep up with demand. Additionally, a strong economy can keep prices elevated and demand steady.

“Even with market uncertainty and recession fears, I expect home values to increase annually,” Sanford explains.

However, he notes that shifts in mortgage rates could change the dynamic. A major rate drop could push more homeowners to sell, further increasing supply and softening price growth. On the flip side, fewer sellers may list their homes if rates remain high, keeping inventory tighter.

Mortgage Rates: The Waiting Game

For buyers and homeowners alike, mortgage rates are the real wild card. As of March 20, 2025, the average 30-year fixed mortgage rate is 6.67% (Freddie Mac PMMS), slightly lower than last year’s 6.87%.

Fannie Mae predicts the average rate on a 30-year fixed-rate mortgage in 2025 will be about 6.8%, dropping to 6.5% in 2026, but Sanford is more cautious.

“With the current administration pivoting on tariffs and other economic policies quickly, predicting rates is difficult,” he says.

Still, for homeowners looking to refinance, even modest rate declines could unlock savings.

Today, 1.87 million homeowners are “in the money” to refinance—meaning they could lower their rate by at least 0.75%. Among them, 727,000 are considered highly qualified candidates, with at least 20% equity and a credit score of 720+.

Sanford advises borrowers against trying to time the market.

“If you can afford it in today’s market and at today’s rates, buy the house. You can always refinance as rates improve.”

For homeowners considering tapping into their home equity, there’s some good news—HELOC rates, which are tied to the Fed’s moves, are expected to drop by 75 to 100 basis points this year if the Fed follows through with rate cuts. That could make borrowing against home equity a more attractive option in the coming months.

Savings Take a Hit as Economic Pressures Weigh on Americans

The U.S. savings rate remains low as many Americans struggle to set aside money amid rising costs and mounting financial pressures. In January 2025, the personal saving rate—the portion of disposable income that households save—stood at 4.6%, according to the U.S. Bureau of Economic Analysis. While personal income increased by 0.9% in the same month, consumer spending declined slightly, suggesting that households are exercising more caution with their finances.

“It’s difficult to envision a significant increase in the personal savings rate any time soon,” said Austin Kilgore, an analyst at Achieve Center for Consumer Insights. “Prices are still high, and tariffs could make them increase even more. Elevated interest rates on credit cards and other unsecured debts mean more of consumers’ monthly payments are going toward interest instead of paying down principal.”

Debt burdens are a growing concern. A recent survey by Achieve found that 57% of households carry a credit card balance to cover essential expenses, and 26% have accumulated more debt in the past three months. Many consumers rely on credit to get by rather than tapping into their savings, a trend that could leave them vulnerable to financial shocks.

Despite these challenges, some experts remain optimistic about Americans’ ability to build savings.

Julie Beckham, financial education officer at Rockland Trust, emphasized the importance of forming strong financial habits.

“Saving is like any habit—starting can be the hardest part, and consistency is crucial,” she said. “If you are struggling to get started, begin by picking any amount you’re comfortable with and regularly stow it away in a savings account.”

As inflation remains elevated and economic uncertainty lingers, the ability of Americans to save will likely depend on their income level, existing debt burdens and financial discipline. While some households are making progress in building emergency funds, many continue to face difficult choices between saving, spending and borrowing.

The Bottom Line for the Rest of 2025

The economic landscape remains uncertain, but preparation will be key for consumers navigating the rest of the year ahead.

Mortgage rates may decline, but affordability remains a challenge. Homebuyers should weigh their options carefully, as home prices are not expected to fall significantly.

What Else Should Consumers Know About the Remaining Three Quarters?

• Credit card debt is rising, and rates remain high. Paying off balances should be a priority to avoid excessive interest costs.
• CD and Treasury yields may decline. Savers should consider locking in higher rates now before the Fed begins cutting rates.
• Access to credit is tightening. Borrowers should ensure their credit scores and financial profiles are in the best shape possible before applying for loans.

The best financial strategy for 2025 is to save where possible, borrow cautiously and stay ahead of changing interest rates.