NEW YORK—Americans now pay their financial institutions an average 17% interest on credit cards, the highest level recorded by the Federal Reserve, a new report reveals.
The rising monthly cost for U.S. consumers may be one reason they're spending less, as April's weak retail sales laid out, observed CNBC.
“The combination doesn't bode well for GDP growth. The Fed's short-term lending rate is now targeted between 2.25% and 2.5%. However, it has gone up nine times since December 2015 and has triggered increases across the board in consumer debt instruments, due in part because it costs banks more to borrow,” CNBC said.
“This is key because of the obvious influence that consumers have on the overall economy,” Peter Boockvar, chief investment officer of Bleakley Advisory Group, told CNBC. “The trajectory is creeping up and is something that we have to watch closely.”