{"id":42259,"date":"2026-03-18T18:17:57","date_gmt":"2026-03-18T18:17:57","guid":{"rendered":"https:\/\/financialrush.com\/?p=42259"},"modified":"2026-03-18T18:17:57","modified_gmt":"2026-03-18T18:17:57","slug":"what-holding-rates-unchanged-means-for-you","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=42259","title":{"rendered":"What holding rates unchanged means for you"},"content":{"rendered":"

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Amid geopolitical turmoil,\u00a0the Federal Reserve<\/a> held interest rates steady<\/a> at the conclusion of its policy meeting on Wednesday.\u00a0<\/p>\n

An energy shock and higher inflation expectations due to the war in Iran<\/a> ruled out any possibility of an interest rate cut, analysts said. <\/p>\n

Since December, the federal funds rate has remained steady in a target range of 3.5% to 3.75%.\u00a0The Fed’s benchmark sets what banks charge each other for overnight lending, but also has a trickle-down effect on many consumer borrowing and savings rates<\/a>.<\/p>\n

For Americans\u00a0struggling\u00a0in the face of surging gas prices and overall affordability challenges, the central bank’s decision does little to ease budgetary pressures.<\/p>\n<\/div>\n

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Read more CNBC personal finance coverage<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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“Higher fuel costs, along with the downstream effects on shipping, travel and trade, are likely to add further pressure to consumer prices,” said certified financial planner Stephen Kates, a financial analyst at Bankrate. “Cutting rates while inflation is rising would be difficult to justify, even if it might receive political support.”<\/p>\n<\/div>\n

Powell under pressure<\/h2>\n
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President Donald Trump<\/a> has been after Fed Chair\u00a0Jerome Powell<\/a>\u00a0to lower the central bank’s benchmark rate, arguing that inflation has been “defeated<\/a>.” <\/p>\n

“Where is the\u00a0Federal Reserve\u00a0Chairman, Jerome ‘Too Late’ Powell, today? He should be dropping Interest Rates, IMMEDIATELY, not waiting for the next meeting,” Trump wrote in a Truth Social post on March 12. Powell\u00a0has just one more meeting before his term at the helm ends.<\/p>\n

Before the oil shock, inflation<\/a> was holding above the Fed’s 2% target but not worsening. Now the surge in energy costs could have longer-term\u00a0inflation implications<\/a>, experts say.<\/p>\n

“If tensions in the Iran conflict ease, inflation pressures will gradually subside. Until then, the economy may have to absorb a period of higher inflation again,” Kates said.<\/p>\n<\/div>\n

How the Fed decision affects your finances<\/h2>\n
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The U.S.-Israel attack on Iran\u00a0also helped push the benchmark\u00a010-year Treasury<\/a>\u00a0yield\u00a0up to 4.208%.\u00a0The yield on the 10-year note is a barometer for mortgage rates and other longer-term loans.<\/p>\n

Short-term rates are more closely pegged to the\u00a0prime rate<\/a>, which is typically 3 percentage points above the federal funds rate. <\/p>\n

Credit cards<\/h3>\n

For example, most\u00a0credit cards<\/a>\u00a0have a short-term, variable rate, so they are closely pegged to the Fed’s benchmark.<\/p>\n

The\u00a0average annual percentage rate has held just under 20% since November, according to Bankrate.<\/p>\n

“Credit card rates don’t tend to move much unless forced by the Fed, so I expect that we may see a few months of relative stability,” said Matt Schulz, chief credit analyst at LendingTree.\u00a0<\/p>\n

Mortgage rates<\/h3>\n

Alternatively, fixed mortgage rates<\/a> don’t directly track the Fed: They are largely tied to Treasury yields and the U.S. economy.\u00a0<\/p>\n

Concerns that the expanding war in the Middle East may fuel inflationary pressures have already pushed the average rate for a 30-year, fixed-rate mortgage up to 6.29% as of Tuesday, from 5.99% at the end of February, according to\u00a0Mortgage News Daily<\/a>.<\/p>\n

“With global uncertainty, a shaky economic outlook and the Fed’s rate-cut pause likely to continue, I expect mortgage rates to remain relatively volatile,” Schulz said.<\/p>\n<\/div>\n

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Student debt<\/h3>\n

Federal student loan rates<\/a>\u00a0are also fixed and based in part on the 10-year Treasury note<\/a>. Current interest rates on undergraduate federal student loans made through June 30 are 6.39%, according to the U.S. Department of Education.<\/p>\n

Car loans<\/h3>\n

Auto loan debt is another pain point for over 100 million Americans, in part due to inflated prices and high financing costs, according to the Consumer Financial Protection Bureau<\/a>. <\/p>\n

The average amount financed for a new car reached an all-time high of $43,759 at the end of last year, according to Edmunds. The average monthly payment on a new-vehicle purchase is at a record high, as is the share of new-car buyers with an auto payment of $1,000 or more<\/a>.<\/p>\n

“Car buyers continue to combat sky-high car prices by stretching their loan terms to achieve more palatable monthly payments. Unfortunately, those longer terms are tied to higher interest rates, keeping average rates inflated,” said Joseph Yoon, consumer insights analyst at Edmunds. This month, higher gas prices<\/a> only add to affordability concerns. <\/p>\n

One potential bright spot for car shoppers: eligible taxpayers can\u00a0deduct up to $10,000<\/a>\u00a0in auto loan interest this tax season under a temporary provision enacted as part of President Donald Trump’s\u00a0One Big Beautiful Bill Act<\/a>\u00a0signed in July.<\/p>\n

Savings rates<\/h3>\n

For savers, there’s another silver lining <\/strong>to the Fed decision. <\/p>\n

While the Fed has no\u00a0direct influence\u00a0on deposit rates, the yields tend to be correlated with changes in the target federal funds rate. So, although rates on certificates of deposit and high-yield savings accounts\u00a0have fallen from recent highs, they are still holding above the annual rate of inflation.<\/p>\n

As long as the central bank stays on the sidelines, “the rate pause is good news for savers,” Schulz said.<\/p>\n

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