Fed expected to hold rates steady; many consumer loan costs likely to stay stable

The Federal Reserve is expected to hold its benchmark interest rate steady on Wednesday, which should keep borrowing costs on many consumer loans stable and make further reductions in savings yields less likely, the Times reports. The Fed’s policy rate, the federal funds rate, stands in a range of 3.5 to 3.75 percent.

The central bank has cut rates three times last year but has appeared reluctant to decrease them further while inflation remains above its targets and the labor market is relatively stable. Credit card rates have eased somewhat but remain high: the average interest rate on credit cards was 19.62 percent last week, down from a record 20.79 percent in August 2024, according to Bankrate.

The Times notes card issuers are generally slower to pass along Fed cuts, and changes can take a couple of billing cycles. President Trump has called for a one-year cap on card rates at 10 percent, a proposal that would almost certainly require Congressional action. Mortgage rates do not move in lockstep with the Fed; 30-year fixed rates generally track the 10-year Treasury yield.

The average rate on a 30-year fixed mortgage was 6.09 percent as of Jan. 22, according to Freddie Mac, down from 6.96 percent a year earlier.

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