When rates rise, lenders may tighten their lending standards, making it harder for individuals to qualify for loans. This is especially tough for first-time homebuyers or those with lower credit scores, who may find themselves facing increased scrutiny in their loan applications. Donald Trump has not kept the newsroom from reporting aggressively about the president.
Subscribe to Our Newsletter
As you can see, the Wall Street Journal’s prime rate can be an interesting tool for your financial arsenal. While there’s no need to check it daily, if you do hear the news that the prime rate has changed, it’s certainly helpful to have an understanding of the implications. If you’re unable to keep up with rising rates, you might even consider refinancing with a debt consolidation loan or looking for a lower-interest balance transfer. Keeping track of shifts in the prime rate isn’t always an easy task, as they don’t tend to happen at predictable intervals. For instance, the prime rate only changed once in all of 2002, but on a nearly monthly basis in 2001. Due to the WSJ’s solid track record of staying on top of the current prime rate, it’s become the go-to source for many borrowers and lenders.
Those offering the best rates would no doubt get most of the business, while those who set their rates too high wouldn’t be likely to last very long. Instead, many financial institutions calculate their rates by combining the U.S. prime rate with various percentages based on perceived borrower risk. Some smaller banks will use a larger bank’s prime as a reference for pricing loans, but most use the Wall Street Journal version.
Therefore borrowers with a higher credit score can receive a lower margin while borrowers with a lower credit score will receive a higher margin. In a variable rate credit product, the margin remains the same over the life of the loan; however, the variable rate is adjusted when there is a change in the underlying indexed rate. Many borrowers and investors alike also use the Wall Street Journal’s prime rate as a sort of economic indicator.
Data source: Wall Street Journal (print edition)
That reporting won the paper the 2019 Pulitzer Prize for national reporting. In 2025, under Tucker’s leadership, The Journal published a birthday greeting from Trump to convicted sex trafficker Jeffrey Epstein that featured the silhouette of a naked woman. Before publication, Trump called Tucker try to stop the story from running. When The Journal published the story despite the threat, the president sued the paper for $10 billion. While the Wall Street Journal prime rate may initially sound like a really great subscription deal, it’s actually something else entirely.
Reporters and editors managed to put out a paper from a printing plant in New Jersey. For their breaking news coverage of the day, the staff won a Pulitzer Prize. If the prime rate goes down, that means that it’s becoming cheaper to borrow money. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. The tightened lending environment could lead to a scenario where more potential buyers are sidelined, hurting home sales in your area.
Bank FindThis bank is insured by the Federal Deposit Insurance Corporation. Click on the certificate ID # to confirm this bank’s FDIC coverage using the FDIC’s Bank Find tool.
The prime rate only changes when at least 7 of the 10 banks surveyed raise or lower their rates. At that point, the WSJ will calculate and publish a new prime rate both in print and on their website’s market page. You don’t need to monitor the WSJ Prime Rate every day, but depending on your financial goals, you might want to pay attention to the prime rate and its recent trends. If you want to pay off credit card debt, you should be aware of what interest rate you’re paying on that debt.
What Is the Wall Street Journal Prime Rate?
The WSJ Prime Rate is affected by the federal funds rate and is an indicator of the overall cost of money for banks and lenders, and of the overall functioning of financial markets. In Dec. 2008, it reached a then low of 3.25% after being reported at 9.5% in the early 2000s. Generally, the rate is dictated by changes from the Federal Reserve’s Federal Open Market Committee, which meets every six weeks and reports on the level of the federal funds rate. The WSJ prime rate provides a gauge for the prime rate at banks across the industry. The WSJ prime rate has historically been approximately 3% higher than the federal funds rate.
The third-party sites are not under the control of Askmoney and Askmoney is not responsible for the content of any third-party site. The offers appearing on this site may be from partners which Askmoney receives compensation for being listed here. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). As money begins to loosen up, you’ll also see the effects of increased liquidity across the economy and markets. Due to the fact that money is now cheaper to borrow, many businesses will even take the opportunity to look into expansion.
- She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies.
- The two had previously founded Dow Jones & Company and created an index of railroad companies that became the benchmark Dow Jones Industrial Average.
- This eventually leads to higher stock prices for leading companies, and many investors want to position themselves to get in on the action as early as possible.
How WSJ Prime Affects Interest Rates
- This means that if the prime rate goes up, so does the cost of carrying a balance on your credit card.
- The U.S. economy is made up of billions of little everyday moments of consumers making decisions and responding to incentives, all trying to maximize their wealth and happiness.
- Understanding that a higher prime rate can impact your auto loan will put you in a better position when negotiating financing options.
- Short-term interest rates may be lower, but what about long-term mortgage rates?
When Kilgore became the paper’s managing editor in 1941, he brought a vision for a publication that was about more than the rises and falls of the stock market. He encouraged reporters to produce “situation stories,” which went beyond telling people what had happened in the news to explaining why it had happened. Kilgore led the paper until his death in 1967 and oversaw huge growth in the paper’s influence and profitability. Generally, the prime rate tends to be three points higher than the federal funds rate, causing a sort of trickle-down effect for borrowers. The more expensive it is for banks to borrow money, the more expensive it will become for customers to borrow money from the banks.
Askmoney.com is not an intermediary, broker/dealer, investment advisor, or exchange and does not provide investment advice or investment advisory services. All content on this site is provided for general information purposes only and does not constitute accounting, legal, tax or other professional advice. This site may contain links to third-party websites or other content for information purposes only.
This eventually leads to higher stock prices for leading companies, and many investors want to position themselves to get in on the action as early as possible. So, before tapping into that home equity, make sure you understand how changes in the prime rate might alter your repayment terms. The Journal’s newsroom has been rocked by the tragedy that sometimes accompanies world-class journalism.
Your payments will increase too, putting extra pressure on your monthly budget. This is especially important if you live in a pricey area like Chinatown Manhattan, where every dollar counts. As you navigate your financial options, keep in mind that the WSJ Prime Rate directly affects your pocketbook. Fluctuations in this rate can either ease the financial burden or inflate costs significantly. For a homeowner, understanding this relationship is crucial to making sound financial decisions.
In a nutshell, as the WSJ Prime Rate rises or falls, so do your loan costs. This can create a ripple effect, influencing everything from your mortgage payments to the interest rates on your credit cards. Therefore, keeping an eye on this key indicator can empower you to make informed financial choices.
If you have some cash savings in the bank, you might want to look for a higher-yielding savings account. The overall “cost of money” and your costs of borrowing (or your yield as a saver and investor) are affected by the prime rate. The prime rate is the interest rate that commercial banks charge to their most creditworthy best forex times customers. The federal funds overnight rate serves as the basis for the prime rate, and prime serves as the starting point for most other interest rates. The WSJ prime rate is one of the market’s leading sources for comprehensive average prime rate reporting. The WSJ prime rate gets its name from The Wall Street Journal’s practice of polling the 10 largest U.S. banks to see what their prime lending rate is.
English 
Chinese