The Fed didn’t cut interest rates. Here are 5 things to watch next.

Core Viewpoint - The Federal Reserve is currently holding interest rates steady amid various economic pressures and uncertainties, with expectations of potential rate cuts in 2026, but the timing and extent of these cuts remain uncertain due to mixed economic signals and political influences [1][2][5]. Economic Conditions - The job market is showing signs of weakness, with hiring at its lowest since 2013, despite a current unemployment rate of 4.4% [3][19]. - Inflation remains above the Fed's target of 2%, complicating the decision-making process for rate cuts [5][21]. - The Fed is expected to maintain a restrictive policy to help bring inflation down, with policymakers looking for clear evidence of economic improvement before making any cuts [4][21]. Interest Rate Forecast - Bankrate's annual forecast predicts three cuts totaling 0.75 percentage points in 2026, while investors anticipate two cuts starting in June 2026 [1][10]. - Mortgage rates are projected to fluctuate between 5.7% and 6.5% in 2026, with current averages at 6.25% for 30-year fixed mortgages [9][10]. Labor Market Insights - The labor market is not as robust as desired, with only 584,000 jobs added last year, the lowest since 2003 outside of a recession [19][20]. - Economists predict the unemployment rate may rise to 4.5% by the end of 2026, with an average of 64,500 jobs added monthly [20]. Market Reactions - The stock market is experiencing a rally, with the S&P 500 reaching record highs, but volatility remains a concern for long-term investors [16][17]. - The Fed's decisions on interest rates are closely watched as they impact borrowing costs and overall economic sentiment [5][18].