The Latest Personal Finance News for October 2026

Federal Reserve Hikes Its Interest Rate for the First Time Since 2023

The Federal Reserve raised the federal funds rate to a target range of 3.75% to 4.00% in its September meeting. The Federal Open Market Committee voted to increase the rate for the first time since 2023, largely in an attempt to combat inflation.

Fed officials' median projection calls for one more quarter-point hike before the end of the year. If inflation proves stubborn, however, it could prompt more hikes to bring it under control.

Expectations of more hikes have driven Treasury yields up as well, with the 10-year yield reaching 5.11% on September 23, its highest level in 19 years. Mortgage rates, which closely follow the 10-year Treasury yield, are also on the rise. According to Freddie Mac, the average 30-year fixed mortgage rate climbed to 7.03% on September 24, the first time it's topped 7% since January 2025.

Why It Matters

Most consumer loan and credit card interest rates are tied to the prime rate, which moves in lockstep with the federal funds rate. As a result, a Fed rate hike will typically mean higher rates on new loans, as well as on existing loans and credit cards with variable rates.

Higher mortgage rates will also make buying or refinancing a home more expensive, in a time when homebuyers and owners are already struggling to keep up with high housing costs.

On the other hand, interest rates offered on deposit accounts, such as high-yield savings accounts and certificates of deposit (CDs), tend to increase after a Fed rate hike, which can be beneficial for your savings.

What You Can Do

• Learn what the federal funds rate is.
• See how rising interest rates impact credit cards.
• Find out how the Fed affects mortgage rates.
• Understand how a Fed rate increase affects savings accounts.

Inflation Climbs to 3.4% as Gas Prices Surge

Consumer prices rose by 0.4% on a month-to-month basis and 3.4% annually through August, according to the Bureau of Labor Statistics. That comes after the consumer price index (CPI) rose by just 0.1% in July.

A major culprit driving higher inflation is gasoline, which rose by 3.9% from July to August and a staggering 27.4% from the previous year. Both gas and diesel prices have risen sharply since the U.S. and Israel launched strikes on Iran on February 28. The war has cut tanker traffic through the Strait of Hormuz, a narrow shipping lane that about 20% of the world's oil passes through. The U.S. Energy Information Administration expects oil prices to stay high until global supplies return to normal.

The core inflation rate, which excludes volatile food and energy costs, sits at 2.4%, which is much closer to the Federal Reserve's preferred 2% rate.

Why It Matters

Rising prices shrink how far your paycheck goes, and gas is a hard expense to cut back on if you commute to work or school every day.

Elevated inflation is also a major reason the Fed gave for raising interest rates in September. If prices continue to climb, both everyday expenses and borrowing could get more expensive in the months ahead.

What You Can Do

• Read up on what inflation is and how it affects your budget.
• Find ways to save money on gas.
• Learn how to make a budget.
• Follow these steps to build an emergency fund.

SAVE Borrowers Face Deadline to Choose a New Repayment Plan

Borrowers in the Saving on a Valuable Education (SAVE) plan are running out of time to choose a new student loan repayment plan, and the first deadlines arrived September 29. A court order ended SAVE in March, and the Education Department has notified 7.5 million borrowers that they need to switch.

Loan servicers began sending exit notices on July 1, and each borrower has 90 days from the date of their notice to choose a new plan. That said, some servicers are sending notices in waves through October, so your deadline depends on when you heard from your servicer.

Why It Matters

If you miss your deadline, your servicer will move you into the standard repayment plan or the new tiered standard plan based on when your loans were disbursed. Payments under both are based on your balance and a fixed repayment term instead of your income, which could lead to a much higher monthly bill.

Income-driven options include income-based repayment (IBR) and the new repayment assistance plan (RAP), both of which base payments on your income and number of dependents. Keep in mind that your SAVE forbearance ends as soon as your servicer processes your new plan request, even if your 90-day window is still open.

Tip: You don't have to wait for a notice from your servicer to switch plans. You can compare your repayment options and submit a request on StudentAid.gov now.

What You Can Do

• Learn how income-driven repayment plans work.
• Find out how to choose the best student loan repayment plan.
• Understand the difference between deferment and forbearance.
• Brush up on student loan repayment basics.

The 2027-28 FAFSA Is Open

College students and their families can start applying for college financial aid, as the 2027-28 Free Application for Federal Student Aid (FAFSA) launched a week before the October 1 deadline.

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, 2028, 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 good credit scores 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.