Fed keeps rates unchanged: what it means for mortgages, credit cards and loans

• Two Fed governors, Stephen Miran and Christopher Waller, dissented and favored an immediate quarter-point rate cut
• Average credit card rates fell to 23.79% in January 2026, but borrowers received only 65 basis points of the Fed's 75-basis-point cuts from 2025, with a $7,000 balance costing $3,314 in interest over 41 months
• The 30-year fixed mortgage rate stands at 6.42%, up from the prior week, as these rates track Treasury yields rather than Fed decisions; economists expect the Fed to hold through spring before potentially cutting in June 2026

Summary

The Federal Reserve held interest rates steady on Wednesday in a 10-2 vote, with Governors Stephen Miran and Christopher Waller dissenting in favor of a quarter-point cut. The decision reflects a cautious stance as the Fed navigates solid economic growth against elevated inflation and a cooling job market. Officials characterized economic activity as expanding at a "solid pace" while acknowledging unemployment has stabilized and inflation remains "somewhat elevated."

Mortgage Market Impact:

The rate hold offers little relief to homebuyers and refinancers. Mortgage rates track long-term Treasury yields rather than Fed rates, driven by inflation expectations and investor sentiment. The 30-year fixed mortgage rate currently stands at 6.37%, up 0.06 percentage points weekly, while the 15-year rate sits at 5.38%—both higher than recent expectations.

Consumer Lending:

Variable-rate products tied to the prime rate (currently 6.75%) are directly affected. Credit card rates averaged 23.79% in January 2026, the lowest in nearly three years but still elevated. Despite three Fed cuts in late 2025, credit card companies only passed through 65 basis points of the 75-basis-point reduction. A $7,000 credit card balance at current rates costs $3,314 in interest over 41 months with $250 monthly payments.

HELOCs average 7.44% nationally, while high-yield savings accounts offer 4-5% APY—approximately 10 times the 0.39% national average.

Economists expect the Fed to maintain rates through spring before potentially cutting in June 2026, advising consumers to prioritize high-interest debt repayment and rate shopping.