If you were hoping for a Federal Reserve rate cut, it’s not happening today — but that’s been the Fed’s playbook for a while.
The Fed just announced they’re keeping rates steady at 4.25%–4.50%, signaling that they’re still playing the long game on inflation.
So, what does this actually mean for you? Whether you’re looking at loans, refinancing, or just trying to make sense of the economy, the following is a breakdown of what you need to know.
Slow and steady wins the race (hopefully)
Inflation has eased from its highs, but the Fed still sees it as somewhat elevated. Their job is to keep prices stable without accidentally pulling the rug out from under the economy.
Cut rates too soon, and inflation could creep back up. Wait too long, and borrowing stays expensive longer than necessary, which slows the economy. So, instead of jumping the gun, the Fed is holding its position and watching how things play out.
What does this mean for you?
While the Fed doesn’t directly control personal loan or mortgage rates, its decisions help shape them. Here’s how the decision to hold rates steady could impact you:
- Homebuyers & Refinancers: If you were waiting for a dip, you might be waiting a while. If refinancing makes sense now, it’s worth looking at the numbers instead of assuming a better deal is just around the corner.
- Personal Loans & Credit Cards: Borrowing costs will likely stay the same. If you need a loan now, consider shopping around instead of hoping for rates to drop later.
- Savings Accounts: The silver lining — high-yield savings accounts and CDs are still offering strong returns. If you’ve been meaning to move your money into a better account, this might be your window.
Should you wait or act now?
The temptation is always to try and time the market, but the best financial moves aren’t about guesswork.
- If you need to borrow now, try comparing lenders and locking in a good rate. Betting on future cuts is a gamble.
- If you’re refinancing, consider whether the savings outweigh the costs. If your current rate is significantly higher, it might be worth moving now rather than waiting for the unknown.
- If you’re saving, consider taking advantage of high-yield savings accounts and CDs while rates are still high.
A quick trip through recent fed history
This isn’t the first time the Fed has gone with the wait-and-see strategy.
- In 2006, they paused rate hikes for over a year before cutting, trying to keep inflation in check while avoiding a slowdown. The 2006 pause was after hikes—not a direct comparison to today’s conditions.
- In 2019, they held steady for months before eventually cutting rates when economic signals pointed south. Again, not a direct comparison, but these are times many of us lived through.
Each time, the move was less about the moment and more about where the economy was heading next. And right now, the Fed’s saying: Let’s see what happens next before making a move.
Focus on what you can control
The Fed’s decision wasn’t surprising, but it was deliberate. They’re prioritizing stability, and for most people, that’s not a bad thing.
Instead of waiting on what the Fed might do next, focus on what makes sense for you right now. Whether it’s borrowing, saving, or refinancing, the best financial moves are the ones that fit your current goals and needs. In other words, your life doesn’t have to go on pause too.