Federal Reserve Boosts Interest Rate Amid Inflation Concerns

The Federal Reserve raised its benchmark interest rate by a quarter of a percentage point to 3.75-4 percent, the first increase since 2023.

This move could lead to higher borrowing costs for car shoppers and more expensive vehicle financing.

According to Cox Automotive's Dealer Sentiment Index for Q3 2026, nearly 40% of dealers consider borrowing rates an obstacle, slightly above the previous quarter but below last year's figure.

The rate increase comes amid concerns about inflation, which remained elevated at 3.7% in July, and President Trump's public pressure to reduce interest rates.