The Latest Personal Finance News for October 2025

The Federal Reserve Cuts Interest Rates, Signals More to Come

The Federal Reserve cut interest rates in September, lowering its federal funds rate to between 4.00% and 4.25%. This was the Fed's first rate cut since December 2024, and it comes amid mounting concerns about a cooling labor market. The unemployment rate rose to 4.3% in August.

Fed officials anticipate slashing rates two more times this year, in October and December. Forecasts show they expect the main interest rate to drop to between 3.5% and 3.75% by the end of 2025.

Why It Matters

Lower interest rates can help American families and business owners who are dealing with high costs for loans and credit cards. The changes might also help the housing market by making home loans cheaper.

But there's a downside for people who save money: They'll earn less on their savings accounts and other safe investments. Rate cuts typically reduce what savers can earn on short-term investments, but they could help the stock market if the economy stays strong.

What You Can Do

• Learn about the federal funds rate.
• Understand how the Fed rate cuts impact your finances.
• Look for ways to reduce your risks when borrowing money.

Inflation Edges Higher Again

Consumer prices went up more than expected in August, with inflation hitting 2.9% over the past year. The consumer price index rose 0.4% in August after going up just 0.2% in July. The annual inflation rate jumped to 2.9% in August from 2.7% in July, also reaching the highest level since January.

The biggest price increases came from housing costs, food and gas. Housing costs rose 0.4% in August and were the main reason for the monthly increase. Food prices jumped 0.5% over the month, while gas prices increased 1.9%.

Why It Matters

Higher inflation means families are paying more for everyday items. The price increases are partly caused by tariffs on goods from other countries. Companies are slowly passing these extra costs on to shoppers, which will take many months to fully show up in prices.

Experts anticipate that inflation will keep going up, particularly due to the Fed's rate-cutting efforts, so it's important to start looking for ways to build savings and pay down debt now.

What You Can Do

• Check the Bureau of Labor Statistics CPI page on October 15.
• Read up on how inflation works.
• Research ways to fight inflation and save money.
• Understand how inflation impacts your credit card debt.

Mortgage Rates Continue to Cool

Mortgage rates have dropped to their lowest point in nearly a year, according to Freddie Mac's weekly survey. The 30-year fixed-rate mortgage averaged 6.26% as of September 18, down from 6.35% the week before.

But experts don't expect further drops in the near term. In fact, Fannie Mae's September economic and housing outlook anticipates mortgage rates to end the year at 6.4%.

Why It Matters

The drop in mortgage rates could offer a window of opportunity for homebuyers and people looking to refinance. Even a small decrease in rates can lead to big savings over the life of a 30-year loan—potentially thousands of dollars less in interest payments.

The rate drop has already caused both new mortgage and refinance applications to surge, and buyers are looking again at homes that once felt too expensive. However, forecasts indicate that people waiting for rates to drop even further may end up disappointed.

What You Can Do

• Stay up to date on current mortgage rates.
• Read more about housing forecasts for 2025.
• Understand how rising interest rates increase mortgage costs.
• Learn how to get a lower mortgage rate.

The 2026-27 FAFSA Opens on October 1

College students and their families can start applying for college financial aid on October 1, when the 2026-27 Free Application for Federal Student Aid (FAFSA) becomes available.

Students must fill out this form to be considered for federal student aid, and many states and colleges also use the information to award their own grants and scholarships. The federal deadline to submit next year's FAFSA is June 30, 2027, but states and colleges often have much earlier deadlines for their financial aid programs.

Why It Matters

Students who submit their FAFSA early get significantly more financial aid than those who wait. On average, students who file the FAFSA during the first three months tend to get twice as many grants as students who file it later, according to Saving for College.

What's more, many federal, state and college aid programs give out money on a first-come, first-served basis because funding is limited, so colleges can run out of money for students who apply later.

What You Can Do

• Learn more about how financial aid works.
• Read up on common FAFSA mistakes and how to avoid them.
• Get details on how to read your financial aid award letter.
• Find out how to pay for college when financial aid isn't enough.

Good Credit Can Contribute to a Healthy Financial Plan

While there are aspects of your financial situation that are outside of your control, building and maintaining a good credit score can help you weather challenges and save money in the long run.

With Experian's free credit monitoring service, you'll get access to your FICO^® Score^Θ and your Experian credit report. With this information in hand, you can gauge your credit health and target areas of your credit profile that you can improve over time. And with real-time alerts whenever your report is updated, you can spot potential issues and fraud and address them quickly.