{"id":40509,"date":"2026-01-26T16:15:49","date_gmt":"2026-01-26T16:15:49","guid":{"rendered":"https:\/\/financialrush.com\/?p=40509"},"modified":"2026-01-26T16:15:49","modified_gmt":"2026-01-26T16:15:49","slug":"fed-rates-likely-to-hold-steady-heres-what-that-means","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=40509","title":{"rendered":"Fed rates likely to hold steady: Here\u2019s what that means"},"content":{"rendered":"

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Despite escalating political pressure<\/a> from President Donald Trump<\/a>,\u00a0the Federal Reserve<\/a> is expected to hold interest rates steady at its policy meeting this week.\u00a0<\/p>\n

Amid a somewhat softening labor market, inflation pressures<\/a> and an uncertain geopolitical landscape, futures market pricing is implying\u00a0almost no chance of a rate cut, according to the CME Group\u2019s\u00a0FedWatch<\/a>\u00a0gauge.\u00a0<\/p>\n

The Fed\u2019s pause may disappoint Americans eager for lower debt payments, according to Matt Schulz, LendingTree\u2019s chief credit\u00a0analyst.\u00a0<\/p>\n

\u201cEven so, rates on several types of loans are at their lowest levels in years and are likely to keep falling, at least for a little while longer,\u201d Schulz said. \u201cThat\u2019s welcome news as affordability issues continue to plague families around the country.\u201d<\/p>\n<\/div>\n

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Read more CNBC personal finance coverage<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

Trump vs. Powell<\/h2>\n
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Should the Fed pause as expected, Trump is likely to be the most vocal critic of the central bank\u2019s decision. <\/p>\n

The president ratcheted up his criticism of Fed Chair\u00a0Jerome Powell<\/a>\u00a0at the World Economic Forum in Davos, Switzerland, last week and said in a CNBC interview<\/a>\u00a0that he had narrowed down the list of candidates\u00a0to succeed Powell \u201cdown to maybe one<\/a>.\u201d He\u2019s widely expected to pick someone<\/a> who is inclined to cut rates more aggressively. <\/p>\n

The president said in remarks last week that inflation has been \u201cdefeated<\/a>.\u201d He has also said in prior comments about the Fed that maintaining a federal funds rate that is too high makes it harder for businesses and consumers to borrow, putting the U.S. at an economic disadvantage to countries with lower rates.<\/p>\n<\/div>\n

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US President Donald Trump gestures as he delivers a special address during the World Economic Forum (WEF) annual meeting in Davos on January 21, 2026. The World Economic Forum takes place in Davos from January 19 to January 23, 2026. <\/p>\n

Mandel Ngan | Afp | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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The Fed\u2019s benchmark sets what banks charge each other for overnight lending, but also has a trickle-down effect on many of the\u00a0borrowing and savings rates<\/a>\u00a0Americans see every day.<\/p>\n

Shorter-term rates are more closely pegged to the\u00a0prime rate<\/a>, which is typically 3 percentage points above the federal funds rate. Longer-term rates are more dependent on\u00a0inflation<\/a>\u00a0expectations and other economic factors.<\/p>\n

Altogether, the impact of the Fed\u2019s actions\u00a0varies significantly across different types of loans. <\/p>\n<\/div>\n

Mortgages<\/h2>\n
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Fixed mortgage rates<\/a>, for example, don\u2019t directly track the Fed but typically follow the lead of long-term Treasury rates. <\/p>\n

The average rate for a 30-year, fixed-rate mortgage was 6.19% as of Friday, according to\u00a0Mortgage News Daily<\/a>, down from over 7% a year ago \u2014\u00a0helped in part by Trump\u2019s push to have\u00a0Fannie Mae and Freddie Mac<\/a>\u00a0buy $200 billion in mortgage bonds.<\/p>\n

Just on Trump\u2019s announcement of that plan, the average rate on the 30-year fixed-rate mortgage sank briefly below 6% earlier this month.<\/p>\n

\u201cMortgage rates did dip below 6% in recent weeks for the first time in years, only to spike again this past week due to geopolitical chaos surrounding Greenland,\u201d said Melissa Cohn, regional vice president of William Raveis Mortgage. If tensions simmered, rates could ease again, she said, but \u201crates go up way faster than they come down.\u201d<\/p>\n<\/div>\n

Credit cards<\/h2>\n
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By contrast, most\u00a0credit cards<\/a>\u00a0have a variable rate, so there\u2019s a more direct connection to the Fed\u2019s benchmark. <\/p>\n

Following three consecutive rate cuts in 2025, the average credit card interest rate in the U.S. fell to 23.79% in January, marking the lowest level since March 2023,\u00a0according to LendingTree.<\/a><\/p>\n

Still, \u201cthose rates are not going to come down to a level that is going to ease the burden on those who are carrying a balance,\u201d said certified financial planner Stephen Kates, a financial analyst at Bankrate. <\/p>\n<\/div>\n

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Currently, about 175 million people in the U.S. have credit cards, and while some pay off the balance each month, roughly 60% of credit card users have revolving debt, according to the Federal Reserve Bank of New York.\u00a0<\/p>\n

However, Trump is trying to have a hand in here, too. Trump\u2019s call for a\u00a0temporary 10% cap\u00a0<\/a>on\u00a0credit cards<\/a>, could mean significantly lower interest rate charges<\/a> for those who carry a balance from month to month. Yet executives at\u00a0some of the biggest U.S. banks, including JPMorgan Chase<\/a>