What Happens to Social Security’s Cost of Living Adjustment (COLA) If the Fed Leaves Rates the Same?

Core Viewpoint - The Federal Reserve has lowered its benchmark interest rate for the third time this year and may hold rates steady in 2026, which will not directly impact Social Security cost-of-living adjustments (COLA) [2][3][8]. Economic Conditions - Current economic forecasts for 2026 suggest moderate inflation, stable unemployment, and moderate GDP growth, leading to a "wait and see" approach from the Fed regarding interest rate cuts [4][5]. - If the Fed holds rates steady, borrowing costs for consumer products like mortgages and personal loans could remain stable, benefiting consumers and retirees [8]. Social Security Implications - Social Security COLAs are based on inflation and are not directly affected by the Fed's interest rate decisions; the raise for 2026 is already determined [7][8]. - A potential rate cut in 2026 could increase consumer spending, which might lead to higher inflation and a larger COLA for seniors in 2027 [9].