Americans’ Concerns Over High Interest Rates Have Declined, But Financial Anxiety Remains

Half of U.S. adults say that interest rates are too high, ahead of the Fed’s expected move to cut its benchmark interest rate next week. That share is down from before the Fed began its rate cutting cycle – over two thirds said rates were too high in June 2024. However, many consumers are still feeling the pinch from elevated rates in their personal finances and spending behavior. Furthermore, as President Trump has heightened his criticisms of the Fed, more respondents believe the President has control of interest rate policy, which has implications for the broader economy going forward.

Over 2 in 3 respondents felt interest rates were too high before the cutting cycle began in 2024 and declined somewhat to 62% in the days following the last interest rate reduction by the Fed in December. Since then, the Fed has left rates steady, but the share of consumers who say rates are too high has dropped an additional 10 percentage points to 51%. Nearly all of the movement has come from the “much too high” category, which decreased from 41% to 25% over the past year. 

Monetary policy notoriously operates with “long and variable lags” because it generally takes time for movements in the fed funds rate to trickle down into consumer rates including those for auto loans, credit cards, mortgages, etc. This pattern is evident in Morning Consult survey data, which shows that it has taken several months for consumers’ perceptions of interest rates to adjust, even as the Fed has held its policy steady.

While a smaller percentage of consumers believe rates are too high, among those who feel this way, a large share still feel that high rates have affected their personal finances and dampened their spending. Interest rates, although down from their highs in 2024, are still historically elevated and as a result more of a burden to many consumer households. 

70% said high rates have “somewhat” or “greatly” affected their personal finances, just slightly below the reported share in December. Higher interest rates not only increase the cost of borrowing, but they also leave less room in personal budgets for other types of spending – 72% of respondents who felt rates were too high said they cut back spending on nonessentials as a result. 

What consumers say and what they do are often at odds, and in the case of spending, consumers have spent rather robustly in 2025. However, this varies considerably by income cohorts – lower income households (those making $50k a year or less) have spent less in 2025 compared to the previous 3 years. As with many economic hurdles, higher income households appear to be more able to continue to spend freely despite the added pressure of continually elevated rates while lower income households have cut back.

Since tracking began, consumers have changed their opinion on not only the level of interest rates, but also on who controls them. In theory, the Federal Reserve through its monetary policy tools has the most substantial influence on interest rates in the United States (there are caveats, like last year when mortgage rates increased after rate cuts). Although a majority of adults think that the Fed controls interest rates (55%), that share is down 7 percentage points from a year ago. 

At the same time, respondents were slightly more likely to say that the President controlled interest rates (11%), perhaps in response to the highly publicized pressure for the Fed to lower rates from President Trump. Democrats and Independents have driven this growing perception that the president controls interest rates, while Republicans’ opinions have remained relatively steady. 

While only 11% of respondents believe the President controls rates, this reflects a broader trend of increasing politicization around the Fed, which could threaten its credibility. If this perception grows, inflation expectations risk becoming “unanchored,” undermining confidence in the Fed’s ability to maintain its 2% target. So far, data from the Cleveland Fed and Morning Consult show no signs of this, but expectations could shift if more Americans conflate monetary policy with presidential control. Rising inflation expectations can become self-fulfilling, fueling further price growth.

Don’t expect immediate relief following September rate cuts

After the dour August employment situation report from the Bureau of Labor Statistics, markets are pricing in rate cuts not just later this month, but also in the subsequent October and December FOMC meetings. Although decreased rates will eventually bring relief to consumer finances, the “long and variable” lags of monetary policy will likely mean that relief will come slowly – as we have seen manifest itself in Morning Consult’s interest rate survey. Furthermore, inflation has begun creeping up again, pulling away from the Fed’s 2% target, and growing politicization surrounding the Fed could exacerbate price growth. As a result, benefits from rate cuts may be slow to materialize and could ultimately be outweighed by rising inflation, which threatens to further erode consumers’ purchasing power.